Last year,a firm had net income of $62,000 on sales of $595,000.The projected sales for next year are $654,500.Assume the firm uses the percentage of sales method for pro forma statements.What is the projected net income?
A) $59,500
B) $65,500
C) $68,200
D) $71,500
E) $71,900

Question

Quizplus · Accepted Answer

Percentage increase in sales = ($654,500 - $595,000) / $595,000 = 0.10
Pro forma net income = $62,000 × (1 + 0.10) = $68,200

Last Year,a Firm Had Net Income of $62,000 on Sales