Question
The Lion Basketball team has been requested to prepare a quarterly budgeted income statement for 2016. The team manager expects that sales in the first
The Lion Basketball team has been requested to prepare a quarterly budgeted income statement for 2016.
The team manager expects that sales in the first quarter of 2016 will increase in volume by 10% over the same quarter of the preceding year and will then increase by 5% for each succeeding quarter in 2016.
The corporate head office has requested that the team manager maintain an inventory in dollars equal to 15% of the next quarter's sales.
Quarterly purchases average 40% of quarterly sales.
Budgeted ending inventory on December 31, 2015 is $10,000.
Quarterly salaries are $10,400 plus 8% of sales. All salaries are classified as sales salaries.
Other quarterly operating expenses are estimated to be as follows:
Rent expense $5,200
Depreciation on office equipment $1,800
Utilities expense $2,100
Miscellaneous expenses 3% of sales
The income statement information for the first quarter of 2015 was as follows:
Sales ................................................................................................ $160,000
Cost of goods sold .......................................................................... 71,000
Instructions
Prepare a budgeted quarterly income statement for the first quarter of 2016. (Show computations.)
Solution Ex. 189
L Basketball Team | |
Budgeted Income Statement | |
For the Quarter Ending March 31, 2016 | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started