Reference no: EM131745134

Question - Budgeted Income Statement

Pendleton Company, a merchandising company, is developing its master budget for 2015. The income statement for 2014 is as follows:

Pendleton Company Income Statement For Year Ending December 31, 2014
Gross sales	$3,000,000
Less: Estimated uncollectible accounts	(60,000)
Net sales	2,940,000
Cost of goods sold	(1,650,000)
Gross profit	1,290,000
Operating expenses (including $25,000 depreciation)	(750,000)
Net income	$540,000

The following are management's goals and forecasts for 2015:

1. Selling prices will increase by 6 percent, and sales volume will increase by 4 percent.

2. The cost of merchandise will increase by 3 percent.

3. All operating expenses are fixed and are paid in the month incurred. Price increases for operating expenses will be 10 percent. The company uses straight-line depreciation.

4. The estimated uncollectible are 2 percent of budgeted sales.

Required - Prepare a budgeted fictional income statement for 2015.