Coral Seas Jewelry Company makes and sells costume jewelry. For the coming year, Coral Seas expects sales of $18,000,000 and cost of goods sold of $9,900,000. Advertising is a key part of Coral Seas' business strategy, and total marketing expense for the year is budgeted at $3,240,000. Total administrative expenses are expected to be $720,000. Coral Seas has no interest expense. Income taxes are paid at the rate of 40 percent of operating income. Required: Question Content Area 1. Construct a budgeted income statement for Coral Seas Jewelry Company for the coming year. Coral Seas Jewelry CompanyBudgeted Income StatementFor the Coming Year $- Select - - Select - Gross margin $fill in the blank a6ff1f020fbb069_5 Less: $- Select - - Select - - Select - Operating income $fill in the blank a6ff1f020fbb069_11 - Select - $- Select - Question Content Area 2. What if Coral Seas had interest payments of $540,000 during the year? What effect would that have on operating income? On income before taxes? On net income? If no effect, select "no impact" and enter "0". Operating income to $fill in the blank b3bcec07e03f07c_2 Income before taxes to $fill in the blank b3bcec07e03f07c_4 Net income to $fill in the blank b3bcec07e03f07c_6
Coral Seas Jewelry Company makes and sells costume jewelry. For the coming year, Coral Seas expects sales of $18,000,000 and cost of goods sold of $9,900,000. Advertising is a key part of Coral Seas' business strategy, and total marketing expense for the year is budgeted at $3,240,000. Total administrative expenses are expected to be $720,000. Coral Seas has no interest expense. Income taxes are paid at the rate of 40 percent of operating income.
Required:
Question Content Area
1. Construct a budgeted income statement for Coral Seas Jewelry Company for the coming year.
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$- Select - | |
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- Select - | |
Gross margin | $fill in the blank a6ff1f020fbb069_5 | |
Less: | ||
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$- Select - | |
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- Select - | - Select - |
Operating income | $fill in the blank a6ff1f020fbb069_11 | |
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- Select - | |
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$- Select - |
Question Content Area
2. What if Coral Seas had interest payments of $540,000 during the year? What effect would that have on operating income? On income before taxes? On net income? If no effect, select "no impact" and enter "0".
Operating income |
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to | $fill in the blank b3bcec07e03f07c_2 |
Income before taxes |
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to | $fill in the blank b3bcec07e03f07c_4 |
Net income |
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to | $fill in the blank b3bcec07e03f07c_6 |
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