Calgary Industries is preparing a budgeted income statement for 2018. Predicted sales for the year are $760,000 and cost of goods sold is 40% of sales. The expected selling expenses are $84,000 and the expected general and administrative expenses are $93,000, which includes $26,000 of depreciation. The company's income tax rate is 30%. The budgeted net income for 2018 is:

Question

Cannoli

Business

17 December, 18:03

Calgary Industries is preparing a budgeted income statement for 2018. Predicted sales for the year are $760,000 and cost of goods sold is 40% of sales. The expected selling expenses are $84,000 and the expected general and administrative expenses are $93,000, which includes $26,000 of depreciation. The company's income tax rate is 30%. The budgeted net income for 2018 is:

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Jacklyn · Answer 1

The budgeted net income for 2018 is : $195,300

Explanation:

Prepare the budgeted income statement for 2018 as follows:

Sales $760,000

Less Cost of Sales ($760,000 * 40%) ($304,000)

Gross Profit $456,000

Less Expenses:

Selling Expenses ($84,000)

General and administrative ($93,000)

Net Income before tax $279,000

Income tax expense ($279,000 * 30%) ($83,700)

Net Income for the year $195,300

Conclusion:

The budgeted net income for 2018 is : $195,300