Budgeted Income Statement Coral Seas Jewelry Company makes and sells costume jewelry. For the coming year, Coral Seas expects sales of $19,900,000 and cost of goods sold of $10,945,000. Advertising is a key part of Coral Seas' business strategy, and total marketing expense for the year is budgeted at $3,582,000. Total administrative expenses are expected to be $796,000. Coral Seas has no interest expense. Income taxes are paid at the rate of 40 percent of operating income. Required: Question Content Area 1. Construct a budgeted income statement for Coral Seas Jewelry Company for the coming year. Coral Seas Jewelry CompanyBudgeted Income StatementFor the Coming Year $- Select - - Select - Gross margin $fill in the blank 2306e2fe1072fa1_5 Less: $- Select - - Select - - Select - Operating income $fill in the blank 2306e2fe1072fa1_11 - Select - $- Select - Question Content Area 2. What if Coral Seas had interest payments of $597,000 during the year? What effect would that have on operating income? On income before taxes? On net income? If no effect, select "no impact" and enter "0". Operating income to $fill in the blank 861010fff032ffc_2 Income before taxes to $fill in the blank 861010fff032ffc_4 Net income to $fill in the blank 861010fff032ffc_6

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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Question Content Area

1. Construct a budgeted income statement for Coral Seas Jewelry Company for the coming year.

Coral Seas Jewelry CompanyBudgeted Income StatementFor the Coming Year

		$- Select -
		- Select -
Gross margin		$fill in the blank 2306e2fe1072fa1_5
Less:
	$- Select -
	- Select -	- Select -
Operating income		$fill in the blank 2306e2fe1072fa1_11
		- Select -
		$- Select -

Question Content Area

2. What if Coral Seas had interest payments of $597,000 during the year? What effect would that have on operating income? On income before taxes? On net income? If no effect, select "no impact" and enter "0".

Operating income	to	$fill in the blank 861010fff032ffc_2
Income before taxes	to	$fill in the blank 861010fff032ffc_4
Net income	to	$fill in the blank 861010fff032ffc_6

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