Coral Seas Jewelry Company makes and sells costume jewelry. For the coming year, Coral Seas expects sales of $16,100,000 and cost of goods sold of $8,855,000. Advertising is a key part of Coral Seas' business strategy, and total marketing expense for the year is budgeted at $2,898,000. Total administrative expenses are expected to be $644,000. 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 ade044f46060001_5 Less:       $- Select -     - Select - - Select - Operating income   $fill in the blank ade044f46060001_11     - Select -     $- Select -   Question Content Area 2. What if Coral Seas had interest payments of $483,000 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 b2c9bb093fdc062_2 Income before taxes   to $fill in the blank b2c9bb093fdc062_4 Net income   to $fill in the blank b2c9bb093fdc062_6

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter7: Budgeting
Section: Chapter Questions
Problem 14EB: Earthies Shoes has 55% of its sales in cash and the remainder on credit. Of the credit sales, 70% is...
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Coral Seas Jewelry Company makes and sells costume jewelry. For the coming year, Coral Seas expects sales of $16,100,000 and cost of goods sold of $8,855,000. Advertising is a key part of Coral Seas' business strategy, and total marketing expense for the year is budgeted at $2,898,000. Total administrative expenses are expected to be $644,000. 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 ade044f46060001_5
Less:    
 
$- Select -  
 
- Select - - Select -
Operating income   $fill in the blank ade044f46060001_11
 
  - Select -
 
  $- Select -
 

Question Content Area

2. What if Coral Seas had interest payments of $483,000 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 b2c9bb093fdc062_2
Income before taxes
 
to $fill in the blank b2c9bb093fdc062_4
Net income
 
to $fill in the blank b2c9bb093fdc062_6
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ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College