Income statement for 2022 Line item Amount ($) Sales 500,000...

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Finance

Income statement for 2022

Line item Amount ($)

Sales 500,000

- COGS 200,000

= Gross profit 300,000

- SG&A 100,000

- Depreciation 50,000

= Operating profit 150,000

- Interest 25,000

= Taxable income 125,000

- Taxes (28%) 35,000

= Net income 90,000

Sales are expected to increase to $600,000 in 2023, while interest expenses and the average tax rate are expected to stay constant.

Attempt 3/10 for 3.5 pts.

Line item	Amount ($)
Sales	500,000
- COGS	200,000
= Gross profit	300,000
- SG&A	100,000
- Depreciation	50,000
= Operating profit	150,000
- Interest	25,000
= Taxable income	125,000
- Taxes (28%)	35,000
= Net income	90,000

Part 1

Prepare a pro forma income statement for 2023 using the percent-of-sales method. What is the expected net income?

Submit

Attempt 1/10 for 5.5 pts.

Part 2

We also know the break-down into fixed and variable costs for 2022:

	Fixed costs	Variable costs
COGS	50,000	150,000
SG&A	75,000	25,000

Prepare a pro forma income statement for 2023 using the percent-of-sales method and distinguish between fixed and variable costs. What is the expected net income?

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