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Noventis Corporation prepared the following estimates for the four quarters of the current year: First Quarter Second Quarter Third Quarter Fourth Quarter Sales $ 1,050,000
Noventis Corporation prepared the following estimates for the four quarters of the current year: |
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | |||||
Sales | $ | 1,050,000 | $ | 1,260,000 | $ | 1,470,000 | $ | 1,680,000 |
Cost of goods sold | 405,000 | 485,000 | 555,000 | 605,000 | ||||
Administrative costs | 260,000 | 160,000 | 165,000 | 175,000 | ||||
Advertising costs | 0 | 120,000 | 0 | 0 | ||||
Executive bonuses | 0 | 0 | 0 | 56,000 | ||||
Provision for bad debts | 0 | 0 | 0 | 54,000 | ||||
Annual maintenance costs | 62,000 | 0 | 0 | 0 | ||||
Additional Information |
First-quarter administrative costs include the $110,000 annual insurance premium. | |
Advertising costs paid in the second quarter relate to television advertisements that will be broadcast throughout the entire year. | |
No special items affect income during the year. | |
Noventis estimates an effective income tax rate for the year of 40 percent. |
a. | Assuming that actual results do not vary from the estimates provided, determine the amount of net income to be reported each quarter of the current year. |
......................Net Income
1st Quarter
2nd Quarter
3rd Quarter
4th Quarter
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