Solution-Prepare a budgeted functional income statement

Prepare a budgeted functional income statement

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Reference no: EM131736849

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	$2,500,000
Less: Estimated uncollectible accounts	(50,000)
Net sales	2,450,000
Cost of goods sold	(1,375,000)
Gross profit	1,075,000
Operating expenses (including $25,000 depreciation)	(625,000)
Net income	$450,000

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 expense 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 functional income statement for 2015.

Reference no: EM131736849

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Prepare a budgeted functional income statement

Reference no: EM131736849

Reference no: EM131736849

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