Question

Exercise 9-4A (Algo) Income statement for internal use LO 9-1 Gibson Company has provided the following Year 2 data. $505,000 196,000 45,000 3,300 16,400 24,100 2,000 750 Budget Sales Variable product costs Variable selling expense Other variable expenses Fixed product costs Fixed selling expense Other fixed expenses Interest expense Variances Sales Variable product costs Variable selling expense Other variable expenses Fixed product costs Fixed selling expense Other fixed expenses Interest expense 7,800 U 4,600 F 2,300 U 1,000 U 280 F 480 F 180 U 110 F Required a. & b. Prepare in good form a budgeted and actual income statement for internal use. Separate operating income from net income in the statements. Actual GIBSON COMPANY Internal Income Statement for Year 2 Budget Sales Variable expenses: Product costs Selling expenses Other expenses Contribution margin Fixed expenses: Product costs Selling expenses Other expenses Operating income (loss) Interest expense Net income (loss)

Answer 1

Solomon Company
Internal Income Statement for Year 2
	Budgeted Amount	Actual Amount
Sales	$5,05,000	$ 4,97,200
Variable expenses:
Production cost	$1,96,000	$ 1,91,400
Selling expenses	$    45,000	$     47,300
Other expenses	$      3,300	$       4,300
Contribution margin	$2,60,700	$ 2,54,200
Fixed expenses:
Production cost	$    16,400	$     16,120
Selling expenses	$    24,100	$     23,620
Other expenses	$      2,000	$       2,180
Operating income (loss)	$2,18,200	$ 2,12,280
Interest expense	$          750	$           640
Net Income (loss)	$2,17,450	$ 2,11,640

If it is helpful, please rate the answer and if any doubt arises let me know

А D 1 Solomon Company 2 Internal Income Statement for Year 2 Budgeted Amount 505000 Actual Amount =B4-D4 Over/ (under) Budget 7800 JU 196000 45000 3300 =B4-SUM(B6:38) =B6-D6 =B7+D7 =B8+D8 =C4-SUM(C6:08) 4600 2300 1000 4 Sales 5 Variable expenses: 6 Production cost 7 Selling expenses 8 Other expenses 9 Contribution margin 10 Fixed expenses: 11 Production cost 12 Selling expenses 13 Other expenses 14 Operating income (loss) 15 Interest expense 16 Net Income (loss) 17 18 280 480 180 16400 24100 2000 =B9-SUM(B11:313) 750 =B14-B15 =B11-D11 =B12-D12 =B13+D13 =C9-SUM(C11:013) =B15-D15 C14-C15 ance 110