Income statement for 2022 Line item Amount ($) Sales 500,000...
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Finance
Income statement for 2022
Line item
Amount ($)
Sales
500,000
- COGS
200,000
= Gross profit
300,000
- SG&A
100,000
- Depreciation
50,000
= Operating profit
150,000
- Interest
25,000
= Taxable income
125,000
- Taxes (28%)
35,000
= Net income
90,000
Sales are expected to increase to $600,000 in 2023, while interest expenses and the average tax rate are expected to stay constant.
Attempt 3/10 for 3.5 pts.
Part 1
Prepare a pro forma income statement for 2023 using the percent-of-sales method. What is the expected net income?
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Attempt 1/10 for 5.5 pts.
Part 2
We also know the break-down into fixed and variable costs for 2022:
Fixed costs
Variable costs
COGS
50,000
150,000
SG&A
75,000
25,000
Prepare a pro forma income statement for 2023 using the percent-of-sales method and distinguish between fixed and variable costs. What is the expected net income?
Answer & Explanation
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