B. PROJECTED INCOME STATEMENT Tamacti Designs, Inc., expects sales during 2022 to rise from the 2021 level of P3.5 million to P4.1 million. Because of a scheduled large loan payment, the interest expense in 2022 is expected to drop to P295,000. The firm plans to increase its cash dividend payments during 2022 to P345,000. The company's year-end 2021 income statement follows. Tamacti Designs, Inc. Income Statement for the Year ended, December 31, 2021 Sales revenue P 3,500,000 Less: Cost of goods sold Gross profits Less: Operating expenses 1,925,000 1,575,000 420,000 Operating profits 1,155,000 Less: Interest expense 400,000 Net profits before taxes Less: Taxes (rate = 40%) 755,000 302,000 Net profits after taxes 453,000 Less: Cash dividends 250,000 To retained earnings P 203,000 *Required: Use the percent-of-sales method to prepare a 2022 pro forma income statement for Tamacti Designs, Inc.

B. PROJECTED INCOME STATEMENT Tamacti Designs, Inc., expects sales during 2022 to rise from the 2021 level of P3.5 million to P4.1 million. Because of a scheduled large loan payment, the interest expense in 2022 is expected to drop to P295,000. The firm plans to increase its cash dividend payments during 2022 to P345,000. The company's year-end 2021 income statement follows. Tamacti Designs, Inc. Income Statement for the Year ended, December 31, 2021 Sales revenue P 3,500,000 Less: Cost of goods sold Gross profits Less: Operating expenses 1,925,000 1,575,000 420,000 Operating profits 1,155,000 Less: Interest expense 400,000 Net profits before taxes Less: Taxes (rate = 40%) 755,000 302,000 Net profits after taxes 453,000 Less: Cash dividends 250,000 To retained earnings P 203,000 *Required: Use the percent-of-sales method to prepare a 2022 pro forma income statement for Tamacti Designs, Inc.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Answer the question attached in the image below
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