Question

4. Danby Sales Inc. is preparing a maste forcasted data to used to prepare the budge this first quarter. eparing a master budget for the first quarter of 2020. Following is Prepare the budget. Prepare a budgeted income statement for SOSIEM bhris M Santo Sales Budget Jan Feb Mar 25,000 26,000 20,000 Sales Price $60 $60 $60 Units Units DM per unit DL per unit OH per unit Production Budget Jan Feb Mar 20,000 28,000 26,000 $10.00 $10.00 $10.00 $7.60 $7.60 $7.60 $2.80 $2.80 $2.80 Comissions Advertising Depreciation Selling Budget 8% of sales 20% of sales $40,000 per month General & Admin Budget Rent $15,000 per month Office Salaries $67,500 per month Interest - annual 12% on a $250,000 note payable Income tax rate 25%

Answer 1

Danby Sales Inc. Budgeted Income Statement For the three months ended March 31, 2020
	January	February	March	Quarter
Budgeted Sales	$ 1,500,000	$ 1,560,000	$ 1,200,000	$ 4,260,000
Less: Cost of Goods Sold	510,000	530,400	408,000	1,448,400
Gross Profit	990,000	1,029,600	792,000	2,811,600
Selling, General and Administrative Expenses
Sales Commission Expense	120,000	124,800	96,000	340,800
Advertising Expense	300,000	312,000	240,000	852,000
Depreciation Expense	40,000	40,000	40,000	120,000
Rent Expense	15,000	15,000	15,000	45,000
Office Salaries Expense	67,500	67,500	67,500	202,500
Total Selling, General and Administrative Expense	542,500	559,300	458,500	1,560,300
Income from Operations	447,500	470,300	333,500	1,251,300
Interest Expense				30,000
Income before Taxes				1,221,300
Income Tax Expense ( 25 % )				305,325
Budgeted Net Income				$ 915,975