Question

North Company has completed all of its operating budgets. The sales budget for the year shows 50,220 units and total sales of $2,414,100. The total unit cost of making one unit of sales is $23. Selling and administrative expenses are expected to be $309,700. Interest is estimated to be $10,260. Income taxes are estimated to be $226,200.Prepare a budgeted multiple-step income statement for the year ending December 31, 2020.

Answer 1

Answer:

A budgered income statement was prepared for North company for the year ending December 31st 2020.

Explanation:

Solution

                              The NORTH COMPANY

                              Budgeted Income Statement

                           For the year December 31st, 2020 Ended

Particulars                                                          Amount

Sales                                                                 $2,414,100

Less: Cost of goods sold

[50,220 Units x $23.00 per unit]                    -11,55,060

The Gross Profit                                                 12,59,040

Less: Selling and administrative expenses     -3,09,700

Earnings before interest and taxes                  9,49,340

Less: Interest Expenses                                   -10,260

The earnings before taxes                                 9,39,080

Less: Income Taxes                                           -2,26,200

The Net Income                                                  7,12,880

The net income for the NORTH COMPANY for the year ended December 31st 2020 is $7,12,880