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My question for the problem below regarding Income statement : How is COGS calculated here? I don't understand how the amount becomes 612,000. Also, what
My question for the problem below regarding Income statement :
How is COGS calculated here? I don't understand how the amount becomes 612,000. Also, what is 738,000?
Can someone explain, please?
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Kaj and Johan have been running a business for one year. Before the second year you will help them to prepare a budgeted income statement, a cash budget and a budgeted balance sheet. Below you have the preliminary balance sheet for the first year. Preliminary balance sheet 31 of December year 1 1. They expect that the total sales is 1080000 SEK. All sales are on credit and the customers will on average receive 30 days credit time. 2. They plan to purchase products for 630000SEK and they expect that the inventory will increase with 18000 SEK. Suppliers will be paid in cash. 3. Kaj and Johan expect to be able to withdraw a small salary of 9000SEK per person each month in cash. 4. They will buy additional equipment for 30000 SEK, paid in cash. The depreciation for all equipment taken together is 15000SEK. 5. Kaj and Johan will rent a small office for 3000 SEK per month, which is paid in cash. 6. They have estimated that the office expenses, like telephone, will be 30000 SEK for the whole year, which is paid in cash. 7. In the conditions for the bank loan it is stated that they will amortize 15000 SEK and pay an interest of 8% at the 31st of December. 8. Disregard VAT and taxes. Solution Budget income statement vear 2Step by Step Solution
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