Construct a pro forma income statement for the first year and second year for the following assumptions:
Question # 00028594
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Updated on: 10/18/2014 06:53 AM Due on: 02/28/2015
| 1. Construct a pro forma income statement for the first year and second year for the following assumptions: | |||||||||
| •Units of Sales in Year 1: 110,000. | |||||||||
| •Price per Unit: $11. | |||||||||
| •Variable cost per unit: 25%. | |||||||||
| •Fixed Costs: $129,000. | |||||||||
| •Income taxes: 20%. | |||||||||
| •Interest Expense: $170,000. | |||||||||
| •In year 2, Price per unit increases to $13.50, and unit of sales increases by 4%, all other assumptions remain the same.. |
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Solution: Construct a pro forma income statement for the first year and second year for the following assumptions: