Answer:
Italian Exports, Inc.
Italian Exports, Inc.
Budgeted Income Statement
For the Month Ending Mar. 31, 2020
Sales $ 567,933
Cost of Goods Sold
Beginning Inventory $0
Purchases 294,820
Cost of Goods Available for Sale $294,820
Ending Inventory (10%) 29,482
Cost of Goods Sold $265,338
Gross Profit 302,595
Operating Expenses:
Marketing Expense (5%) 25,500
Sales Commissions (2%) 11,359
Rent Expense 7,400
Depreciation Expense 1,000
Utilities 2,600
Total Operating Expenses $47,859
Operating income $254,736
Taxes (15% of next month sales) 84,150
Net Income $170,586
Explanation:
a) Data and Calculations:
Estimated Sales $510,000
Sales 567,933
Purchases 294,820
Ending Inventory* 10%
Administrative Salaries 50,360
Marketing Expense** 5% of $510,000 = $25,500
Sales Commissions 2% of $567,933 = $11,359
Rent Expense 7,400
Depreciation Expense 1,000
Utilities 2,600
Taxes*** 15% *of next month's sales **of estimated sales ***of income before taxes
Estimated sales next month = $561,000 (1.1 * $510,000)
Taxes = $84,150 (15% of $561,000)
