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In: Accounting

The data shown were obtained from the financial records of Italian Exports, Inc., for March: Estimated...

  1. 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
    • Direct Material
    • Fixed Sales and Admin Expenses
    • Sales
    • Service Revenue
    • Variable Sales and Admin Expenses
    $
    Cost of Goods Sold
    Beginning Inventory
    • Administrative salaries
    • Beginning Inventory
    • Cost of Goods Available for Sale
    • Ending Inventory
    • Marketing Expenses
    $
    Purchases
    • Administrative Salaries
    • Cost of Goods Available for Sale
    • Ending Inventory
    • Marketing Expenses
    • Purchases
    Cost of Goods Available for Sale
    • Beginning Inventory
    • Cost of Goods Available for Sale
    • Purchases
    • Sales
    • Utilities
    $
    Ending Inventory
    • Beginning Inventory
    • Ending Inventory
    • Purchases
    • Sales
    • Utilities
    Cost of Goods Sold
    • Cost of Goods Sold
    • Gross Profit
    • Income before taxes
    • Net Income
    • Net loss
    $
    Gross Profit
    • Gross Loss
    • Gross Profit
    • Net Income
    • Net Loss
    • Sales
    Operating Expenses
    • Administrative Salaries
    • Beginning Inventory
    • Cost of Goods Available for Sale
    • Ending Inventory
    • Purchases
    $
    • Beginning Inventory
    • Cost of Goods Available for Sale
    • Ending Inventory
    • Marketing Expenses
    • Purchases
    • Beginning Inventory
    • Cost of Goods Available for Sale
    • Ending Inventory
    • Purchases
    • Sales Commissions
    • Beginning Inventory
    • Cost of Goods Available for Sale
    • Ending Inventory
    • Purchases
    • Rent Expense
    • Beginning Inventory
    • Cost of Goods Available for Sale
    • Depreciation Expense
    • Ending Inventory
    • Purchases
    • Beginning Inventory
    • Cost of Goods Available for Sale
    • Ending Inventory
    • Purchases
    • Utilities
    Total Operating Expenses $
    • Gross Profit
    • Income Before Taxes
    • Income From Operations
    • Net Income
    • Net loss
    $
    • Gross Profit
    • Income Before Taxes
    • Income Tax Expense
    • Net Income
    • Net loss
    • Gross Loss
    • Gross Profit
    • Net Income
    • Net Loss
    • Sales
    $

Solutions

Expert Solution

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


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