Daniel Singh, the controller of Meier Corporation, is trying to prepare a sales

Question

Daniel Singh, the controller of Meier Corporation, is trying to prepare a sales budget for the coming year. The income statements for the last four quarters follow First Second Third Fourth Quarter Quarter Quarter Quarter Total Sales revenue Cost of goods sold $179,000 $209,000 $219,000 $269,000 $876,000 107,400 125,400 131,400 161,400 525,600 Gross profit 71,600 83,600 87,600 107,600 350,400 Selling & admin. expenses 17,900 20,900 21,900 26,90087,600 Net income $ 53,700 S 62,700 S 65,700 $ 80,700 $262,800 Historically, cost of goods sold is about 60 percent of sales revenue. Selling and administrative expenses are about 10 percent of sales revenue. Joe Meier, the chief executive officer, told Mr. Singh that he expected sales next year to be 15 percent for each respective quarter above last year's level. However, Ashley Odom, the vice president of sales, told Mr. Singh that she believed sales growth would be only 10 percent. Required a. Prepare a pro forma income statement including quarterly budgets for the coming year using Mr. Meier's estimate First Quarter Secon Quarter Fourth Quarter Total Quarter Sales revenue Cost of goods sold Gross profit Selling & admin. expenses Net income

Explanation / Answer

A)

B)

SALES REVENUE

I II III IV TOTAL SALES REVENUE 205850 240350 251850 309350 1007400 COGS 123510 144210 151110 185610 604440 GROSS PROFIT 82340 96140 100740 123740 402960 SELLING AND ADMINISTRATION EXP 20585 24035 25185 30935 100740 NET INCOME 61755 72105 75555 92805 302220

Related Questions

Navigate

• Browse (All)
• Browse D
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.