(For Breakdown of Costs and Expenses, click on the icon here o in order to copy the contents of the data table below into a spreadsheet.) Metroline Manufacturing Breakdown of Costs and Expenses into Fixed and Variable Components Metroline Manufacturing, Inc. Metroline Manufacturing Income Statement for the Year Ended December 31, 2020 for the Year Just Ended Sales revenue Less: Cost of goods sold (percent-of-sales method) $1,394,000 for the Year Just Ended Cost of goods sold 916,000 $478,000 124,000 $354,000 32,000 $322,000 128,800 $193,200 64,000 $129,200 Sales Fixed cost $216,000 Gross profits Less: Operating expenses Operating profits Less: Cost of goods sold % Variable cost 700,000 Gross profits 2$ Total cost $916.000 Less: Interest expense Operating expenses Fixed expenses Less: Operating expenses Net profits before taxes $40,000 Operating profits $ Less: Taxes (rate = 40%) Variable expenses 84,000 Net profits after taxes Less: Cash dividends Total expenses $124,000 Less: Interest expense Net profits before taxes To retained earnings Less: Taxes Net profits after taxes 2$ Less: Cash dividends To retained earninge
(For Breakdown of Costs and Expenses, click on the icon here o in order to copy the contents of the data table below into a spreadsheet.) Metroline Manufacturing Breakdown of Costs and Expenses into Fixed and Variable Components Metroline Manufacturing, Inc. Metroline Manufacturing Income Statement for the Year Ended December 31, 2020 for the Year Just Ended Sales revenue Less: Cost of goods sold (percent-of-sales method) $1,394,000 for the Year Just Ended Cost of goods sold 916,000 $478,000 124,000 $354,000 32,000 $322,000 128,800 $193,200 64,000 $129,200 Sales Fixed cost $216,000 Gross profits Less: Operating expenses Operating profits Less: Cost of goods sold % Variable cost 700,000 Gross profits 2$ Total cost $916.000 Less: Interest expense Operating expenses Fixed expenses Less: Operating expenses Net profits before taxes $40,000 Operating profits $ Less: Taxes (rate = 40%) Variable expenses 84,000 Net profits after taxes Less: Cash dividends Total expenses $124,000 Less: Interest expense Net profits before taxes To retained earnings Less: Taxes Net profits after taxes 2$ Less: Cash dividends To retained earninge
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Pro forma income statement The marketing department of Metroline Manufacturing estimates that its sales next year will be $1.58 million. Interest expense is expected to remain unchanged at $32,000, and the firm plans to pay
$69,000 in cash dividends. Metroline Manufacturing's income statement for the previous year is given in the table,
along with a breakdown of the firm's cost of goods sold and operating expenses into their fixed and variable components.
a. Use the percent-of-sales method to prepare a pro forma income statement for next year.
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