Question

Preparing budgeted income statement.

Gyro Company has the following totals from its operating budgets:
Selling and administrative expenses budget $244,500
Cost of goods sold budget 727,300
Sales budget 1,222,700
Prepare a budgeted income statement for the year ended December 31, 2011, assuming that income from operations is taxed at a rate of 30%.

Answer 1

Budgeted net income is $175,630

Step-by-step explanation:

The budgeted income statement for the year ended 31 December , 2 011 is presented below , starting with the sales budget amount while budgeted costs of good sold and selling and administrative expenses are deducted from sales,

Budgeted sales $1,222,700

costs of goods sold ($727,300)

operating income $495,400

Selling and administrative expenses ($244,500)

Profit before tax $250,900

Taxes($250,900*30%) ($75,270)

net income $175,630