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Prepare a pro forma income statement for 2015 using the percent-of-sales method. What is the expected net income? We also know the break-down into fixed
Prepare a pro forma income statement for 2015 using the percent-of-sales method. What is the expected net income?
We also know the break-down into fixed and variable costs for 2014:
Prepare a pro forma income statement for 2015 using the percent-of-sales method and distinguish between fixed and variable costs. What is the expected net income?
Intro Income statement for 2014 Line item Sales - COGS = Gross profit - SG&A - Depreciation = Operating profit - Interest = Taxable income - Taxes (28%) = Net income Amount ($) 500,000 200,000 300,000 100,000 50,000 150,000 25,000 125,000 35,000 90,000 Sales are expected to increase to $600,000 in 2015, while interest expenses and the average tax rate are expected to stay constant. COGS SG&A Fixed costs Variable costs 50,000 150,000 75,000 25,000
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