You are to prepare a projected income statement for a proposed business venture. Your desired income is $28,000 and you have the following published statistics: Costs of Goods Sold = 56.9 percent of net sales
Operating Expenses = 37.1 percent of net sales
Gross Profit Margin = 43.1 percent of net sales
This information indicates the net sales on your pro forma "P & L" (income statement)would be ________.
A)$466,667
B)$491,228
C)$500,000
D)none of the above

Question

Quizplus · Accepted Answer

To find the net sales, use the formula: Desired Income = Net Sales - (COGS + Operating Expenses). Given the percentages, Net Sales = $28,000 / (1 - 0.569 - 0.371) = $466,667.

You Are to Prepare a Projected Income Statement for a Proposed