Exercise 20-24 (Static) Budgeted income statement LO P3 Fortune Incorporated is preparing its master budget for the first quarter. The company sells a single product at a price of $25 per un Sales (in units) are budgeted at 150,000 for the first quarter. Cost of goods sold is $14 per unit. Other expense information for the fin quarter follows. Sales Commissions Rent Advertising Office salaries Depreciation Interest 8% of sales dollars per quarter. per quarter $ 42,000 $ 562,500 $ 225,000 $ 120,000 1.25% per quarter per quarter quarterly on $250,000 noté payable
Exercise 20-24 (Static) Budgeted income statement LO P3 Fortune Incorporated is preparing its master budget for the first quarter. The company sells a single product at a price of $25 per un Sales (in units) are budgeted at 150,000 for the first quarter. Cost of goods sold is $14 per unit. Other expense information for the fin quarter follows. Sales Commissions Rent Advertising Office salaries Depreciation Interest 8% of sales dollars per quarter. per quarter $ 42,000 $ 562,500 $ 225,000 $ 120,000 1.25% per quarter per quarter quarterly on $250,000 noté payable
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
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Transcribed Image Text:3
Exercise 20-24 (Static) Budgeted income statement LO P3
Fortune Incorporated is preparing its master budget for the first quarter. The company sells a single product at a price of $25 per unit.
Sales (in units) are budgeted at 150,000 for the first quarter. Cost of goods sold is $14 per unit. Other expense information for the first
quarter follows.
Sales Commissions
Rent
Advertising
Office salaries
Depreciation
Interest
Tav rate
8% of sales dollars)
$ 42,000 per quarter
$ 562,500
$ 225,000
$ 120,000
1.25%
30%
per quarter
per quarter
per quarter
quarterly on $250,000 note payable
Transcribed Image Text:Prepare a budgeted income statement for the first quarter ended March 31. (Round your intermediate and final answ
nearest whole dollar.)
Sales
Cost of goods sold
Gross profit
Selling, general and administrative expenses
Sales commissions expense
Rent expense
Advertising expense
Office salaries expense
Depreciation expense
Interest expense
Income taxes payable
Total operating expenses
FORTUNE, INCORPORATED
Budgeted Income Statement
For Quarter Ended March 31
Net income
$ 150,000
$
0
0
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