The income statements for the Fresh Sandwich Company for 2009 and 2010 are given below. Your boss wants you to prepare a pro forma income statement for 2011 using the same percentage increases as last year for sales, purchases, closing inventory, maintenance expenses, and other expenses. Rent and depreciation are fixed expenses.

Required:
(a) Calculate the percentage increase between 2009 and 2010 for sales, purchases, closing inventory, maintenance expenses, and other expenses.
(b) Prepare the pro forma income statement for 2011.

Transcribed Image Text:

2009 ($000) 2010 ($000) 1,278.44 Sales Less: Cost of sales: 1,031.00 32.00 820.00 852.00 56.00 56.00 967.60 1,023.60 62.72 Opening inventory Plus: purchases Goods available for sale Less: Closing inventory Cost of sales Gross profit Less: Maintenance expenses 796.00 235.00 960.88 317.56 Rent expenses Depreciation Other expenses 65.00 45.00 12.00 57.62 65.00 45.00 12.60 180.22 Earnings before taxes Less: Income tax expense (40%) Net income 165.00 70.00 28.00 42.00 137.3 54.94 82.40