The sales manager and administrative manager of Coffee Oasis have made the following projections to be used
Question:
The sales manager and administrative manager of Coffee Oasis have made the following projections to be used in preparing a budgeted income statement.
a. Total net sales for 20X3 are projected to be \($1,400,000.\) In each quarter the following percentages of total net sales were made:
b. Purchases and merchandise ending inventories are projected as follows. Ending inventory for 20X2 was \($88,250.\)
c. Expenses for 20X3 are projected as follows. Except where noted, percentages are based on projected net sales. For these items, calculate each quarter’s amount by multiplying the percentage times that quarter's net sales. Calculate the annual total by adding the four quarterly amounts. When a dollar amount is given, the total amount should be divided equally among the four quarters.
Federal income taxes are calculated using the tax rate table shown in this chapter. Equal quarterly income tax payments are based on the projected annual federal income tax expense.
Instructions:
1, Prepare aselling expenses budget schedule (Schedule 3) for the four quarters ended December 31, 20X3.
Coffee Oasis rounds all amounts to the nearest \($10.\)
2. Prepare an administrative expenses budget schedule (Schedule 4) for the four quarters ended December 31, 20X3.
3. Prepare a budgeted income statement for the four quarters ended December 31, 20X3.
Step by Step Answer:
