North Company has completed all of its operating budgets. The sales budget for the year shows 50,000 units and total sales of $2,250,000. The total unit cost of making one unit of sales is $25. Selling and administrative expenses are expected to be $300,000. Interest is estimated to be $10,000. Income taxes are estimated to be $200,000. Prepare a budgeted multiple-step income statement for the year ending December 31, 2017.

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Business

Brooklynn Fitzgerald

23 June, 13:17

North Company has completed all of its operating budgets. The sales budget for the year shows 50,000 units and total sales of $2,250,000. The total unit cost of making one unit of sales is $25. Selling and administrative expenses are expected to be $300,000. Interest is estimated to be $10,000. Income taxes are estimated to be $200,000. Prepare a budgeted multiple-step income statement for the year ending December 31, 2017.

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John Farley · Answer 1

Sales 2,250,000

variable cost 1,250,000

25 x 50,000

Gross Profit 1,000,000

Fixed Cost

Selling & Administrative 300,000

Operating income 700,000

interest expense

10,000

non - controllable expenses 10,000

non-controllable income 690,000

income taxes 200,000

net income 490,000

Explanation:

the interest expense is not part of the operating cost, those cost are not part of the business activity. It is on the non-controllable expenses