In: Accounting
The data shown were obtained from the financial records of Italian Exports, Inc., for March:
| Estimated Sales | $580,000 |
| Sales | 567,926 |
| Purchases | 294,819 |
| Ending Inventory* | 10% |
| Administrative Salaries | 50,320 |
| Marketing Expense** | 5% |
| Sales Commissions | 2% |
| Rent Expense | 7,700 |
| Depreciation Expense | 1,200 |
| Utilities | 2,300 |
| Taxes*** | 15% |
*of next month's sales
**of estimated sales
***of income before taxes
Sales are expected to increase each month by 10%.
Prepare a budgeted income statement. Round your answers to the nearest dollar.
| Italian Exports, Inc. | |
| Budgeted Income Statement | |
| For the Month Ending Mar. 31, 2020 | |
Sales
|
$ |
| Cost of Goods Sold | |
Beginning Inventory
|
$ |
Purchases
|
|
Cost of Goods Available for Sale
|
$ |
Ending Inventory
|
|
Cost of Goods Sold
|
$ |
Gross Profit
|
|
| Operating Expenses | |
|
$ |
|
|
|
|
|
|
|
|
|
|
| Total Operating Expenses | $ |
|
$ |
|
|
|
$ |
| Italian Exports Inc | ||
| Budgeted Income Statement | ||
| For the Year Ended March 31 | ||
| Sales | 567,926 | |
| Less : Cost of Goods Sold | (289,140) | |
| Beginning Inventory | 56,793 | |
| Add : Purchase | 294,819 | |
| Less : Closing Inventory | (62,472) | |
| Gross Profit | 278,786 | |
| Administrative Salary | 50,320 | |
| Marketing Expense | 29,000 | |
| Sales Commission | 11,359 | |
| Rent Expense | 7,700 | |
| Depreciation Expense | 1,200 | |
| Utility Expense | 2,300 | |
| Total Operating Expense | 101,879 | |
| Income Before Tax | 176,907 | |
| Tax (15%) | 8,845 | |
| Net Income | 168,062 |
Gross Profit = Sales - Cost of Goods Sold
Opening inventory = Current Month Sales x 10%
Ending Inventory = (Current Month Sales + 10% of Current month Sales) x 10%
Marketing Expense = 5% of Estimated Sales
Sales Commission = 2% of Current Month Sales
Income Before Tax = Gross Profit - Total Opearting Expense