Blue Specialty Corporation, Illinols Division For the Year ended December 31, 2022 Revenues Sales revenues Cost...

 

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Blue Specialty Corporation, Illinols Division For the Year ended December 31, 2022 Revenues Sales revenues Cost of goods sold Gross Margin Operating Expenses Sales commission expense Office supplies expense Office equipment lease Advertising expense Utilities expense Total operating expenses Net income before taxes Income tax Net income after tax . Illinois: 11,267,000 Wisconsin: 5,896,000 Indiana: 6,806,000 $380,000 $180,000 $200,000 $19,000 $2,500 $5,000 $20,000 $7,000 $53,500 $146,500 $23,440 $123,060 Blue Specialty Corp. sells specialty advertising items. The company operates in select markets within the US and is considering expansion into Wisconsin and Indiana. Blue Specialty's product mix is purchased from manufacturers in China and imported for sale through Blue. Blue Specialty has estimated that sales for the two potential markets would be proportional to their population. Blue Specialty products are primarily sold through a combination of its web site, calling selected customers by phone, and e-mail. Salaries are paid through another division of Blue Specialty. To the left is the 2022 income statement for Blue's Illinois Division. The populations for Illinois and the other two markets under consideration are: Illinois sales are expected to increase by 3% for 2023. Your task is to create separate pro forma income statements for 2023 on all three of these markets. Keep in mind that some expenses (CGS, commissions) are likely to be proportional to sales, some expenses are fixed (advertising, office expenses, utilities). Calculate the three appropriate 2023 pro forma income statements in Excel, then make a recommendation on what actions should be pursued. Be sure format your work like an income statement (like what you see here). You must use Excel to do this. Blue Specialty Corporation, Illinols Division For the Year ended December 31, 2022 Revenues Sales revenues Cost of goods sold Gross Margin Operating Expenses Sales commission expense Office supplies expense Office equipment lease Advertising expense Utilities expense Total operating expenses Net income before taxes Income tax Net income after tax . Illinois: 11,267,000 Wisconsin: 5,896,000 Indiana: 6,806,000 $380,000 $180,000 $200,000 $19,000 $2,500 $5,000 $20,000 $7,000 $53,500 $146,500 $23,440 $123,060 Blue Specialty Corp. sells specialty advertising items. The company operates in select markets within the US and is considering expansion into Wisconsin and Indiana. Blue Specialty's product mix is purchased from manufacturers in China and imported for sale through Blue. Blue Specialty has estimated that sales for the two potential markets would be proportional to their population. Blue Specialty products are primarily sold through a combination of its web site, calling selected customers by phone, and e-mail. Salaries are paid through another division of Blue Specialty. To the left is the 2022 income statement for Blue's Illinois Division. The populations for Illinois and the other two markets under consideration are: Illinois sales are expected to increase by 3% for 2023. Your task is to create separate pro forma income statements for 2023 on all three of these markets. Keep in mind that some expenses (CGS, commissions) are likely to be proportional to sales, some expenses are fixed (advertising, office expenses, utilities). Calculate the three appropriate 2023 pro forma income statements in Excel, then make a recommendation on what actions should be pursued. Be sure format your work like an income statement (like what you see here). You must use Excel to do this.

Answer rating: 100% (QA)

SOLUTION Estimated Illinois sales for 2023 380000 x 103 391400 Estimated Wisconsin sales for 2023 5896000 Estimated Indiana sales for 2023 6806000 Pro ... View the full answer