Question

P22-46A (similar to) Archer Company prepared the following budgeted income statement for the first quarter of 2018: (Click the icon to view the budgeted income statement.) Archer Company is considering two options. i (Click the icon to view the options.) A Data Table - X st dollar. Requirement 1. Prepare budgeted income statements for bot Begin by preparing the budgeted income statement for Option Archer Company Budgeted Income Statement For the Quarter Ended March 31, 201 January Sales Revenue Cost of Goods Sold Gross Profit Archer Company Budgeted Income Statement For the Quarter Ended March 31, 2018 January February March Net Sales Revenue (20% increase per month) S 15,000 $ 18,000 $ 21,600 $ Cost of Goods Sold (60% of sales) 9,000 10,800 12,960 Gross Profit 6,000 7,200 8,640 S and A Expenses ($2,200 + 10% of sales) 3,700 4,000 4,360 Operating Income 2,300 3,200 4,280 Income Tax Expense (20% of operating income) 460 640 856 1,840 $ 2,560 $ 3,424 $ Net Income Total 54,600 32,760 21,840 12,060 S and A Expenses Operating Income 9,780 1,956 7,824 Income Tax Expense Net Income Print Done

Answer 1

N 7 + LỘ B C D E F 1 Actual Data Archer Company Budgeted Income Statement For the Quarter Ended March 31, 2018 January February March Total 6 Net Sales Revenue (20% increase per month) $ 15,000 $ 18,000 $ 21,600 $ 54,600 7 Cost of Goods Sold (60% of sales) $ 9,000 $10,800 $ 12,960 $ 32,760 8 Gross Profit $ 6,000 $ 7,200 $ 8,640 $21,840 9 S and A Expenses ($2,200+10% of sales $ 3,700 $ 4,000 $ 4,360 $ 12,060 10 Operating Income $ 2,300 $ 3,200 $ 4,280 $ 9,780 11 Income Tax Expense (20% of operating income) $ 460 $ 640 $ 856 $ 1,956 12 Net Income $ 1,840 $ 2,560 $ 3,424 $ 7,824 13 G H J K L M Option - 2 Archer Company Budgeted Income Statement For the Quarter Ended March 31, 2018 January February March Total Net Sales Revenue (25% increase per month) $ 15,000 $18,750 $ 23,438 $ 57,188 Cost of Goods Sold (65% of sales) $ 9,750 $ 12,188 $ 15,234 | $ 37,172 Gross Profit $ 5,250 $ 6,563 $ 8,203 $20,016 S and A Expenses ($2,200+10% of sales $ 3,700 $ 4,075 $ 4,544 $ 12,319 Operating Income $ 1,550 $ 2,488 $ 3,659 $ 7,697 | Income Tax Expense (20% of operating income) $ 310 $ 498 $ 732 $ 1,539 Net Income $ 1,240 $ 1,990 $ 2,928 $ 6,158 | 14 15 19 Option - 1 Archer Company 17 Budgeted Income Statement 18 For the Quarter Ended March 31, 2018 January February March Total 20 Net Sales Revenue (25% increase per month) $ 15,000 $18,750 $23,438 $ 57,188 21 Cost of Goods Sold (60% of sales) $ 9,000 $10,800 $ 12,960 $ 32,760 22 Gross Profit $ 6,000 $ 7,950 $ 10,478 $ 24,428 23 S and A Expenses ($2,200+$1,400+10% of sales $ 5,100 $ 5,475 $ 5,944 $ 16,519 24 Operating Income $ 900 $ 2,475 $ 4,534 $ 7,909 25 Income Tax Expense (20% of operating income) $ 180 ($ 495 $ 907 $ 1,582 26 Net Income $ 720 $ 1,980 $ 3,627 | $ 6,327 | 27

amron A Actual Data Archer Company Budgeted Income Statement For the Quarter Ended March 31, 2018 January February March Total 6 Net Sales Revenue (20% increase per month) 15000 18000 21600 =SUM(C6:E6) 7 Cost of Goods Sold (60% of sales) 9000 10800 12960 =SUM(C7:57) 8 Gross Profit =C6-C7 =D6-D7 =E6-E7 =F6-F7 9 S and A Expenses ($2,200+10% of sales =2200+(C6*10% =2200+(D6*10%) =2200+(E6*10%) =SUM(C9:19) 10 Operating Income =C8-C9 =D8-D9 =E8-E9 =F8-F9 11 Income Tax Expense (20% of operating income) =C10*20% =D10*20% =E10*20% =F10*20% 12 Net Income =C10-c11 =D10-D11 =E10-E11 =F10-F11 13 14 15 Option - 1 16 Archer Company Budgeted Income Statement 18 For the Quarter Ended March 31, 2018 January February March Total 20 Net Sales Revenue |(25% increase per month) 15000 =C20+(C20*25%) =D20+(D20*25%) =SUM(C20:E20) 21 Cost of Goods Sold (60% of sales) 9000 10800 12960 =SUM(C21:E21) 22 Gross Profit =C20-C21 =D20-D21 =E20-E21 =F20-F21 23 S and A Expenses ($2,200+$1,400+10% of sales =2200+1400+(C20*10% =2200+1400+(D20*10%) =2200+1400+(E20*10%) =SUM(C23:E23) 24 Operating Income =C22-C23 =D22-D23 =E22-E23 =F22-F23 25 Income Tax Expense (20% of operating income) =C24*20% =D24*20% =E24*20% =F24*20% 26 Net Income =C24-C25 =D24-D25 =E24-E25 =F24-F25 27 17 19

H K L M Option - 2 Archer Company Budgeted Income Statement For the Quarter Ended March 31, 2018 January February March Total 6 Net Sales Revenue (25% increase per month) (15000 =J6+(J6*25%) =K6+(K6*25%) =SUM(J6:L6) 7 Cost of Goods Sold (65% of sales) =J6*65% =K6*65% =L6*65% =SUM(J7:L7) 8 Gross Profit =J6-J7 =KO-K7 =L6-L7 =M6-M7 9 S and A Expenses ($2,200+10% of sales 1=2200+(J6*10%) =2200+(K6*10%) =2200+(L6*10%) =SUM(J9:L9) 10 Operating Income =J8-J9 =K8-K9 =L8-L9 =M8-M9 11 Income Tax Expense (20% of operating income) =J10*20% =K10*20% =L10*20% =M10*20% 12 Net Income =J10-J11 =K10-K11 =L10-L11 =M10-M11 13

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