Calgary Industries is preparing a budgeted income statement for 2015 and has accumulated the...

Question:

Calgary Industries is preparing a budgeted income statement for 2015 and has accumulated the following information. Predicted sales for the year are $765,000 and cost of goods sold is 40% of sales. The expected selling expenses are $84,500 and the expected general and administrative expenses are $93,500, which includes $26,500 of depreciation. The companies income tax rate is 30%.

The budgeted net income for 2015 is:

a. $459,000.

b. $196,700.

c. $281,000.

d. $85,400.

e. $84,300.

Budgeted Income Statement:

The budgeted Income statement calculates the total net earning of the company. It also includes the expected direct and indirect expenses and also the revenue of the company.

Answer and Explanation: 1

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Particulars Amount $
Sales 765000
Less:
Cost of Goods Sold (40% x 765,000) 306000

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Preparing a Budgeted Income Statement

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Chapter 11 / Lesson 10
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Learn about budged income statements. Discover the benefits of this accounting approach, and study how to make a budgeted income statement with an example.


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