Question

Brief Exercise 22-08 Carla Vista Company has completed all of its operating budgets. The sales budget for the year shows 50,820 units and total sales of $2,391,000. The total unit cost of making one unit of sales is $23. Selling and administrative expenses are expected to be $303,100. Interest is estimated to be $13,060. Income taxes are estimated to be $220,400. Prepare a budgeted multiple-step income statement for the year ending December 31, 2020.

Answer 1

Answer and Explanation:

The preparation of the multiple-step income statement is presented below:

Sales $2,391,000

Less: Cost of, goods sold ( 50,820 × $ 23) $1,168,860

Gross profit $1,222,140

Less: Selling and administrative expenses $303,100

Earnings before interest and taxes $919,040

Less; Interest expense $13,060

Earnings before taxes $905,980

Less: Income tax expense $220,400

Net income $685,580