Kerwin Motors is a chain of car dealerships. Sales in the fourth quarter of last year were $3,800,000. Suppose management projects that its current year's quarterly sales will increase by 4% in quarter 1, by another 2% in quarter 2, by another 6% in quarter 3, and by another 5 in quarter 4. Management expects cost of goods sold to be 40% of revenues every quarter, while operating expenses should be 30% of revenues during each of the first two quarters. 20% of revenues during the third quarter, and 35% during the fourth quarter. Prepare a budgeted income statement for each of the four quarters and for the entire year. Requirement Prepare the first portion of the budgeted income statement through gross profit, then complete the statement. (Round the amounts to the nearest whole dollar.) Kerwin Motors Sales Less: Cost of goods sold Gross profit Less: Operating expenses Net income Budgeted Income Statement For the Upcoming Year Quarter 1 Quarter 2 Quarter 3 Quarter 4 Year

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Chapter1: Financial Statements And Business Decisions
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Kerwin Motors is a chain of car dealerships. Sales in the fourth quarter of last year were $3,800,000. Suppose management projects that its current year's quarterly sales will increase by 4% in quarter 1. by another 2% in quarter 2, by another 6% in quarter 3, and by another 5%
in quarter 4. Management expects cost of goods sold to be 40% of revenues every quarter, while operating expenses should be 30% of revenues during each of the first two quarters, 20% of revenues during the third quarter, and 35% during the fourth quarter.
Prepare a budgeted income statement for each of the four quarters and for the entire year.
Requirement
Prepare the first portion of the budgeted income statement through gross profit, then complete the statement. (Round the amounts to the nearest whole dollar.)
Kerwin Motors
Budgeted Income Statement
For the Upcoming Year
Quarter 1
Sales
Less: Cost of goods sold
Gross profit
Less: Operating expenses
Net income
Quarter 2
Quarter 3
Quarter 4
Year
Transcribed Image Text:Kerwin Motors is a chain of car dealerships. Sales in the fourth quarter of last year were $3,800,000. Suppose management projects that its current year's quarterly sales will increase by 4% in quarter 1. by another 2% in quarter 2, by another 6% in quarter 3, and by another 5% in quarter 4. Management expects cost of goods sold to be 40% of revenues every quarter, while operating expenses should be 30% of revenues during each of the first two quarters, 20% of revenues during the third quarter, and 35% during the fourth quarter. Prepare a budgeted income statement for each of the four quarters and for the entire year. Requirement Prepare the first portion of the budgeted income statement through gross profit, then complete the statement. (Round the amounts to the nearest whole dollar.) Kerwin Motors Budgeted Income Statement For the Upcoming Year Quarter 1 Sales Less: Cost of goods sold Gross profit Less: Operating expenses Net income Quarter 2 Quarter 3 Quarter 4 Year
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