The Northeast Regional Division of Union Corp. has been requested to prepare a quarterly budgeted income statement for 2017. The regional 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 corporate head office has requested that the regional 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 2016 is $176000. Quarterly salaries are $20000 plus 5% of sales. All salaries are classified as sales salaries. Other quarterly expenses are estimated to be as follows: $\begin{array}{lr}
\text { Rent expense } & \$ 24,000 \
\text { Depreciation on office equipment } & \$ 12,000 \
\text { Utilities expense } & \$ 3,600 \
\text { Miscellaneous expenses } & 2 \% \text { of sales }
\end{array}$ 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 Northeast Regional Division of Union Corp. has been requested to prepare a quarterly budgeted income statement for 2017. The regional 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 corporate head office has requested that the regional 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 2016 is $176000. Quarterly salaries are $20000 plus 5% of sales. All salaries are classified as sales salaries. Other quarterly expenses are estimated to be as follows: $\begin{array}{lr}
\text { Rent expense } & \$ 24,000 \
\text { Depreciation on office equipment } & \$ 12,000 \
\text { Utilities expense } & \$ 3,600 \
\text { Miscellaneous expenses } & 2 \% \text { of sales }
\end{array}$ 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 Northeast Regional Division of Union Corp. has been requested to prepare a quarterly budgeted income statement for 2017. The regional 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 corporate head office has requested that the regional 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 2016 is $176000. Quarterly salaries are $20000 plus 5% of sales. All salaries are classified as sales salaries. Other quarterly expenses are estimated to be as follows: $\begin{array}{lr}
\text { Rent expense } & \$ 24,000 \
\text { Depreciation on office equipment } & \$ 12,000 \
\text { Utilities expense } & \$ 3,600 \
\text { Miscellaneous expenses } & 2 \% \text { of sales }
\end{array}$ 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 Northeast Regional Division of Union Corp The Income Statement for the First Quarter of 2016 Was