The Victorian Division of Irwin Ltd has been requested to prepare a quarterly budgeted income statement for 2017. The state manager expects that sales in the first quarter of 2017 will increase by 10% over the same quarter of the preceding year and will then increase by 5% for each succeeding quarter in 2017.
The head office has requested that the state manager maintain an inventory in dollars equal to 25% of the next quarter's sales. Quarterly purchases average 55% of quarterly sales. Budgeted ending inventory on December 31, 2015 is $33,000. Quarterly salaries are $5,000 plus 5% of sales. All salaries are classified as sales salaries. Other quarterly expenses are estimated to be as follows:
The income statement for the first quarter of 2016 was as follows:
Instructions : Prepare a budgeted quarterly income statement in tabular form for the first quarter of 2017. (Show computations.)

Question

The Victorian Division of Irwin Ltd has been requested to prepare a quarterly budgeted income statement for 2017. The state manager expects that sales in the first quarter of 2017 will increase by 10% over the same quarter of the preceding year and will then increase by 5% for each succeeding quarter in 2017.
The head office has requested that the state manager maintain an inventory in dollars equal to 25% of the next quarter's sales. Quarterly purchases average 55% of quarterly sales. Budgeted ending inventory on December 31, 2015 is $33,000. Quarterly salaries are $5,000 plus 5% of sales. All salaries are classified as sales salaries. Other quarterly expenses are estimated to be as follows:
  The income statement for the first quarter of 2016 was as follows:
  Instructions : Prepare a budgeted quarterly income statement in tabular form for the first quarter of 2017. (Show computations.)

Quizplus · Accepted Answer

The Answer of The Victorian Division of Irwin Ltd has been requested to prepare a quarterly budgeted income statement for 2017. The state manager expects that sales in the first quarter of 2017 will increase by 10% over the same quarter of the preceding year and will then increase by 5% for each succeeding quarter in 2017.
The head office has requested that the state manager maintain an inventory in dollars equal to 25% of the next quarter's sales. Quarterly purchases average 55% of quarterly sales. Budgeted ending inventory on December 31, 2015 is $33,000. Quarterly salaries are $5,000 plus 5% of sales. All salaries are classified as sales salaries. Other quarterly expenses are estimated to be as follows:
  The income statement for the first quarter of 2016 was as follows:
  Instructions : Prepare a budgeted quarterly income statement in tabular form for the first quarter of 2017. (Show computations.)

The Victorian Division of Irwin Ltd Has Been Requested to Prepare