Question

Complete the Budgeted Income Statements below based on the information given - Check figures are given below
6 7 Check figures are: January Budgeted Gross Margin = $62,650; February Budgeted 8 Operating Income = $23,442; March Budgeted Net Income = $13,353. 9 10 Solution: Get Laughy Taffy, Inc. BUDGETED INCOME STATEMENTS For the Month Ending, Jan 31, 2020 Feb 29, 2020 Mar 31, 2020 16 Sales 17 Cost of Sales 18 Gross Margin 20 Other Operating Expenses 21 Commission Expense 22 Marketing Expense 23 Insurance Expense 24 Selling & Administrative Expense 25 Depreciation Expense 26 Total Other Operating Expenses 27 28 Operating Income 29 BO Other Income (Expense) 31 Interest Expense 32 B3 Income Before Income Tax 35 Income Tax Expense 36 37 Net Income 10 ... Dec 2019 Balance Sheet A. Purchases Budget B. Cash Budget C. Budgeted Income Statement D. Budgeted Balai ... T L 10

Answer 1

Mentioned basis as per above in the particular for the values

Example

Cost of goods sold Jan 2020 - 179000*65% = 116,350/-

Commission Jan 2020 - 179,000*2.5%=4,475/-

Marketing expenses Jan 2020 - 3,540 + (179,000*1.5%) =6,225/-

Selling expenses Jan 2020 - 19800+(179,000*2%) = 23,380/-

Budged income statement of M/s Get Laughy Taffy Inc.
Particular	Jan 31, 2020	Feb 29,2020	Mar 31,2020
Sales	1,79,000	1,84,000	1,63,000
Cost of sales (65% on sales)	1,16,350	1,19,600	1,05,950
Gross Margin	62,650	64,400	57,050
Other Operating expenses
Commission expenses (2.5% on sales)	4,475	4,600	4,075
Marketing expenses (3540+1.5%on sales)	6,225	6,300	5,985
insurance expenses (Jan 1305, Feb and March 1278 per month (15336/12)	1,305	1,278	1,278
Selling & Administrative expenses (19800+2%on sales)	23,380	23,480	23,060
Depreciation expenses	5,300	5,300	5,300
Total other Operating expenses	40,685	40,958	39,698
Operating income	21,965	23,442	17,352
Other income (Expenses) Interest expenses (Since interest is calculated on prinicple O/s only. Accrued interest in not considered)	450	450	450
Income before income tax	21,515	22,992	16,902
Income tax Expenses	4,518	4,828	3,549
Net income	16,997	18,164	13,353
Dividend declared and paid in Feb		15,000
Transfer to reserves	16,997	3,164	13,353