Question

Gig Harbor Boating is the wholesale distributor of a small recreational catamaran sailboat. Management has prepared the following summary data to use in its annual budgeting process: Budgeted unit sales Selling price per unit Cost per unit Variable selling and administrative expense (per unit) Fixed selling and administrative expense (per year) Interest expense for the year 740 $ 2,090 $ 1,490 $ 80 $ 345,000 $ 25,000 Required: Prepare the company's budgeted income statement for the year. Gig Harbor Boating Budgeted Income Statement

Answer 1

Gig Harbor Boating Budgeted Income Statement Sales Cost of Goods Sold Gross Margin Selling and administrative Exopenses Net Operating Income Interest Expense Net Income $1,546,600 $1,102,600 S 444,000 S 404,200 39,800 S 25,000 14,800 Notes: Sales 740*S$2,090 $1,546,600 Cost of Goods Sold 740*$1,490 = $1,102,600 Variable selling and adminidtrative Expense 740*S80 S59,200 Fixed Selling and administrative Expenses $345,000 Selling and administrative Expense $59,200+$345,000= $404,200