Answered: Bolden Company prepared the following…

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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Bolden

Company prepared the following budgeted income statement for

2025:

1(Click

the icon to view the budgeted income statement.)

Read the

requirements2.

Requirement 1. Prepare a budgeted income statement with columns for

1,300

units,

1,400

units, and

1,900

units sold.

Bolden Company

Budgeted Income Statement

For the Year Ended December 31, 2025

Unit sales	1,300
Sales Revenue
Cost of Goods Sold
Gross Profit
Selling and Administrative Expenses
Operating Income

1,400

1,900

Requirement 2. How might managers use this type of budgeted income statement?

The budgeted income statement prepared in Requirement 1 is a

(1)

budget. It allows

Bolden's

managers to plan for

(2)

sales level(s).

Requirement 3. How might spreadsheet software such as Excel assist in this type of analysis?

Technology, such as Excel spreadhseet software, makes it more

(3)

to conduct

(4)

and prepare a company's

(5)

If managers have a better understanding of how changes in sales volume and costs are likely to affect

(6)

they can

(7)

if key assumptions turn out to be wrong.

1: Data Table

Bolden Company
Budgeted Income Statement
For the Year Ended December 31, 2025
Unit sales	1,400
Sales Revenue ($650 per unit)	$910,000
Cost of Goods Sold (55% of sales)	500,500
Gross Profit	409,500
Selling and Administrative Expenses (30% of sales)	273,000
Operating Income	$136,500

2: Requirements

1.	Prepare a budgeted income statement with columns for 1,300 units, 1,400 units, and 1,900 units sold.
2.	How might managers use this type of budgeted income statement?
3.	How might spreadsheet software such as Excel assist in this type of analysis?

(1)

flexible

static

(2)

only a single

various

(3)

cost-effective

time-consuming

(4)

financial statement analysis

sensitivity or "what-if" analysis

(5)

annual report.

master budget.

(6)

net income

the annual report

(7)

maintain the same course of action

react quickly and make changes

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