Budgeted Income Statement Coral Seas Jewelry Company makes and sells costume jewelry. For the coming year, Coral Seas expects sales of $18,300,000 and cost of goods sold of $10,065,000. Advertising is a key part of Coral Seas' business strategy, and total marketing expense for the year is budgeted at $3,294,000. Total administrative expenses are expected to be $732,000. Coral Seas has no interest expense. Income taxes are paid at the rate of 40 percent of operating income. Required: 1. Construct a budgeted income statement for Coral Seas Jewelry Company for the coming year. Coral Seas Jewelry Company Budgeted Income Statement For the Coming Year Sales Less: Cost of goods sold 18,300,000 10,065,000 8,235,000 Gross margin Less: Marketing expense 3,294,000 Administrative expense 732,000 4,026,000 Operating income 4,209,000 Less: Income taxes 1,683,600 Net income 2,525,400 sales and/or decrease expenses. 2. What if Coral Seas had interest payments of $549,000 during the year? What effect would that have on operating income? On income before taxes? On net income? If no effect, select "no impact" and enter "0". Operating income No Impact to $ Income before taxes Decrease to $ Net income Decrease to $ Feedback 0