Fill in the blanks to complete the sentence. A company has the following budget information: Sales: $118,800; COGS: $48,500; Depreciation expense: $1,500; Interest expense: $250; Other expenses: $41,880. If the company budgets 40% for income tax expense, the budgeted net income will be $

16,002

Explanation:

A company has the following budget information

Sales = $118,000

COGS= $48,500

Depreciation expense= $1,500

Interest expense= $250

Other expense= $41,880

The company budgets 40% for income tax expense

= 40/100

= 0.4

The first step is to calculate the total expense incurred in the company

Total expense= COGS+depreciation expense+Interest expense+Other expenses

= $48,500+$1,500+$250+$41,880

= $92,130

The next step is to calculate the pre-tax income

Pre-tax income= Sales-total expenses

= $118,800-$92,130

= $26,670

The next step is to calculate the income tax expense

Income tax expense= $26,670×0.4

= $10,668

Therefore, the budgeted net income can be calculated as follows

Budgeted net income= Pre-tax income-income tax expense

= 26,670-10,668

= 16,002

Hence the budgeted net income is 16,002