Answer:
16,002
Explanation:
A company has the following budget information
Sales = $118,000
COGS= $48,500
Depreciation expense= $1,500
Interest expense= $250
Other expense= $41,880
The company budgets 40% for income tax expense
= 40/100
= 0.4
The first step is to calculate the total expense incurred in the company
Total expense= COGS+depreciation expense+Interest expense+Other expenses
= $48,500+$1,500+$250+$41,880
= $92,130
The next step is to calculate the pre-tax income
Pre-tax income= Sales-total expenses
= $118,800-$92,130
= $26,670
The next step is to calculate the income tax expense
Income tax expense= $26,670×0.4
= $10,668
Therefore, the budgeted net income can be calculated as follows
Budgeted net income= Pre-tax income-income tax expense
= 26,670-10,668
= 16,002
Hence the budgeted net income is 16,002
