Question

Calgary Industries is preparing a budgeted income statement for 2018 and has accumulated the following information. Predicted sales for the year are $730,000 and cost of goods sold is 40% of sales. The expected selling expenses are $81,000 and the expected general and administrative expenses are $90,000, which includes $23,000 of depreciation. The company’s income tax rate is 30%. The budgeted net income for 2018 is:

Answer 1

Answer:

Net Income      186,900

Explanation:

sales                                   730,000

variable cost

40% of sales

40% of 730,000 =            (292,000)

Selling expense                 (81,000)

Administrative expense    (90,000)

Earnigns before taxes        267,000

income tax expense

30% of EBT

30% of 267,000  =               (80,100)

Net Income                         186,900