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(For Breakdown of Costs and Expenses, click on the icon here o in order to copy the contents of the data table below into a spreadsheet.) Metroline Manufacturing Breakdown of Costs and Expenses into Fixed and Variable Components Metroline Manufacturing, Inc. Metroline Manufacturing Income Statement for the Year Ended December 31, 2020 for the Year Just Ended Sales revenue Less: Cost of goods sold (percent-of-sales method) $1,394,000 for the Year Just Ended Cost of goods sold 916,000 $478,000 124,000 $354,000 32,000 $322,000 128,800 $193,200 64,000 $129,200 Sales Fixed cost $216,000 Gross profits Less: Operating expenses Operating profits Less: Cost of goods sold % Variable cost 700,000 Gross profits 2$ Total cost $916.000 Less: Interest expense Operating expenses Fixed expenses Less: Operating expenses Net profits before taxes $40,000 Operating profits $ Less: Taxes (rate = 40%) Variable expenses 84,000 Net profits after taxes Less: Cash dividends Total expenses $124,000 Less: Interest expense Net profits before taxes To retained earnings Less: Taxes Net profits after taxes 2$ Less: Cash dividends To retained earninge

(For Breakdown of Costs and Expenses, click on the icon here o in order to copy the contents of the data table below into a spreadsheet.) Metroline Manufacturing Breakdown of Costs and Expenses into Fixed and Variable Components Metroline Manufacturing, Inc. Metroline Manufacturing Income Statement for the Year Ended December 31, 2020 for the Year Just Ended Sales revenue Less: Cost of goods sold (percent-of-sales method) $1,394,000 for the Year Just Ended Cost of goods sold 916,000 $478,000 124,000 $354,000 32,000 $322,000 128,800 $193,200 64,000 $129,200 Sales Fixed cost $216,000 Gross profits Less: Operating expenses Operating profits Less: Cost of goods sold % Variable cost 700,000 Gross profits 2$ Total cost $916.000 Less: Interest expense Operating expenses Fixed expenses Less: Operating expenses Net profits before taxes $40,000 Operating profits $ Less: Taxes (rate = 40%) Variable expenses 84,000 Net profits after taxes Less: Cash dividends Total expenses $124,000 Less: Interest expense Net profits before taxes To retained earnings Less: Taxes Net profits after taxes 2$ Less: Cash dividends To retained earninge

FINANCIAL ACCOUNTING
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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Pro forma income statement   The marketing department of Metroline Manufacturing estimates that its sales next year will be $1.58 million. Interest expense is expected to remain unchanged at $32,000​, and the firm plans to pay
$69,000 in cash dividends. Metroline​ Manufacturing's income statement for the previous year is given in the table,
along with a breakdown of the​ firm's cost of goods sold and operating expenses into their fixed and variable components.
 
a. Use the ​percent-of-sales method to prepare a pro forma income statement for next year.
 
(For Income Staement, click on the icon here in order to copy the contents of the data table below into a spreadsheet.) (For Breakdown of Costs and Expenses, click on the icon here a in order to copy the contents of the data table below into a spreadsheet.) Metroline Manufacturing, Inc. Metroline Manufacturing Metroline Manufacturing Breakdown of Costs and Expenses into Fixed and Variable Components Income Statement for the Year Ended December 31, 2020 for the Year Just Ended (percent-of-sales method) Sales revenue $1,394,000 for the Year Just Ended Less: Cost of goods sold 916,000 Cost of goods sold Sales $216,000 Gross profits Less: Operating expenses $478,000 Fixed cost Less: Cost of goods sold % 124,000 Variable cost 700,000 Gross profits $ Total cost $916,000 Operating profits Less: Interest expense $354,000 32,000 Operating expenses Fixed expenses Less: Operating expenses % Net profits before taxes $322,000 $40,000 Operating profits Less: Taxes (rate = 40%) 128,800 Variable expenses 84,000 Less: Interest expense Net profits after taxes $193,200 Total expenses $124,000 Less: Cash dividends 64,000 Net profits before taxes $ To retained earnings $129,200 Less: Taxes Net profits after taxes Less: Cash dividends To retained earnings %24 %24
Transcribed Image Text:(For Income Staement, click on the icon here in order to copy the contents of the data table below into a spreadsheet.) (For Breakdown of Costs and Expenses, click on the icon here a in order to copy the contents of the data table below into a spreadsheet.) Metroline Manufacturing, Inc. Metroline Manufacturing Metroline Manufacturing Breakdown of Costs and Expenses into Fixed and Variable Components Income Statement for the Year Ended December 31, 2020 for the Year Just Ended (percent-of-sales method) Sales revenue $1,394,000 for the Year Just Ended Less: Cost of goods sold 916,000 Cost of goods sold Sales $216,000 Gross profits Less: Operating expenses $478,000 Fixed cost Less: Cost of goods sold % 124,000 Variable cost 700,000 Gross profits $ Total cost $916,000 Operating profits Less: Interest expense $354,000 32,000 Operating expenses Fixed expenses Less: Operating expenses % Net profits before taxes $322,000 $40,000 Operating profits Less: Taxes (rate = 40%) 128,800 Variable expenses 84,000 Less: Interest expense Net profits after taxes $193,200 Total expenses $124,000 Less: Cash dividends 64,000 Net profits before taxes $ To retained earnings $129,200 Less: Taxes Net profits after taxes Less: Cash dividends To retained earnings %24 %24
a. Use the percent-of-sales method to prepare a pro forma income statement for the year ended December 31, 2020. Complete the pro forma income statement for the year ended December 31, 2020 below: (Round the percentage of sales to four decimal places and the pro forma income statement amounts to the nearest dollar.) Pro Forma Income Statement Metroline Manufacturing, Inc. for the Year Ended December 31, 2020 (percent-of-sales method) Sales $ Less: Cost of goods sold % Gross profits $ Less: Operating expenses % Operating profits Less: Interest expense Net profits before taxes $ Less: Taxes
Transcribed Image Text:a. Use the percent-of-sales method to prepare a pro forma income statement for the year ended December 31, 2020. Complete the pro forma income statement for the year ended December 31, 2020 below: (Round the percentage of sales to four decimal places and the pro forma income statement amounts to the nearest dollar.) Pro Forma Income Statement Metroline Manufacturing, Inc. for the Year Ended December 31, 2020 (percent-of-sales method) Sales $ Less: Cost of goods sold % Gross profits $ Less: Operating expenses % Operating profits Less: Interest expense Net profits before taxes $ Less: Taxes
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