Coral Seas Jewelry Company makes and sells costume jewelry. For the coming year, Coral Seas expects sales of $16,300,000 and cost of goods sold of $8,965,000. Advertising is a key part of Coral Seas' business strategy, and total marketing expense for the year is budgeted at $2,934,000. Total administrative expenses are expected to be $652,000. Coral Seas has no interest expense. Income taxes are paid at the rate of 40 percent of operating income. Required:
Coral Seas Jewelry Company makes and sells costume jewelry. For the coming year, Coral Seas expects sales of $16,300,000 and cost of goods sold of $8,965,000. Advertising is a key part of Coral Seas' business strategy, and total marketing expense for the year is budgeted at $2,934,000. Total administrative expenses are expected to be $652,000. Coral Seas has no interest expense. Income taxes are paid at the rate of 40 percent of operating income.
Required:
Question Content Area
1. Construct a
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$Sales | |
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Less: Cost of goods sold | |
| Gross margin | $fill in the blank e744f5f1dfcfffc_5 | |
| Less: | ||
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$- Select - | |
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- Select - | - Select - |
| Operating income | $fill in the blank e744f5f1dfcfffc_11 | |
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- Select - | |
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$- Select - |
Question Content Area
2. What if Coral Seas had interest payments of $489,000 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 |
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to | $fill in the blank 6d51ba061f86fc1_2 |
| Income before taxes |
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to | $fill in the blank 6d51ba061f86fc1_4 |
| Net income |
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to | $fill in the blank 6d51ba061f86fc1_6 |
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