Question

A proposed new investment has projected sales of $750,000. Variable costs are 55 percent of sales, and fixed costs are $164,000; depreciation is $65,000. Prepare a pro forma income statement assuming a tax rate of 35 percent. What is the projected net income

Answer 1

Answer:

Net Income 70,525

Explanation:

Preparation of a pro forma income statement assuming a tax rate of 35 percent and projected income

Sales 750,000

Less :Variable Costs (412,500)

(55%×750,0000)

Fixed Costs (164000)

Depreciation (65,000)

EBT 108,500

Taxes 37,975

(35%108,500)

Net Income 70,525

(108,500-37,975)

Therefore the Net income is 70,525