Question

Lamonte Company reports the following budgeted December 31 adjusted trial balance. Debit Credit Cash $ 54,000 Accounts receivable 124,000 Merchandise inventory 68,000 Equipment 129,000 Accumulated depreciation—Equipment $ 29,000 Accounts payable 38,000 Loan payable 26,000 Common stock 210,000 Retained earnings (beginning year balance) 64,000 Sales 524,000 Cost of goods sold 364,000 Loan interest expense 12,000 Depreciation expense 14,000 Salaries expense 126,000 Totals $ 891,000 $ 891,000 Prepare the budgeted income statement for the current year ended December 31. Ignore income taxes.

Answer 1

To prepare the budgeted income statement, calculate the gross profit by subtracting the cost of goods sold from sales revenue. Then, subtract the expenses to obtain the net income.

Step-by-step explanation:

To prepare the budgeted income statement for the current year ended December 31, we need to consider the company's revenues and expenses. From the budgeted trial balance, we can identify the following:
- Sales revenue: $524,000
- Cost of goods sold: $364,000
- Loan interest expense: $12,000
- Depreciation expense: $14,000
- Salaries expense: $126,000

Using this information, we can calculate the gross profit by subtracting the cost of goods sold from the sales revenue ($524,000 - $364,000 = $160,000). Then, we subtract the loan interest expense, depreciation expense, and salary expense from the gross profit to get the net income ($160,000 - $12,000 - $14,000 - $126,000 = $8,000).

Therefore, the budgeted income statement for the current year ended December 31 would show a net income of $8,000.