Brief Exercise 22-08 North Company has completed all of its operating budgets. The sales budget for the year shows 50,810 units and total sales of $2,487,100. The total unit cost of making one unit of sales is $24. Selling and administrative expenses are expected to be $306,100. Interest is estimated to be $12,010. Income taxes are estimated to be $224,500. Prepare a budgeted multiple-step income statement for the year ending December 31, 2020.

Explanation:

The preparation of budgeted Income statement is shown below:-

Budgeted Income statement

For the period ending 31 Dec 2020

Sales                                                              $2,487,100

Less: Cost of goods sold                              $1,219,440

($24 × 50,810)

Gross Profit                                                     $1,267,660

Less: Selling and administrative expenses  $306,100

Income from operations                                  $961,560

Less :Interest expense                                     $12,010

Income before Income taxes                           $949,550

Less: Income tax expense                               $224,500

Net Income/Loss                                              $725,050