Sown below are the totals from period budgets of Terrell corporation for the current year: Revenue budget $100,000 Materials usage from production budget $15,000 Labor Cost Budget $20,000 Manufacturing overhead budget $20,000 General and Administrative budget $30,000 Capital expenditure budget $20,000 Work in process inventories: Beginning of year $10,000 End of Year $5,000 Finished Goods inventory: Beginning of year $15,000 End of Year $10,000 Tax Rate 40% Required: Prepare a forecasted after tax Income Statement for the current year, be sure to show gross margin (GM), and profit before tax (PBT) and profit after tax (PAT).

Name: Techwhiff
Address: 1520 Lavalette Ave, Elkins, WV 26241, USA, Elkins, 26241, US
Telephone: +1 681-298-8325
Price range: 10000

Terrell Corporation Budgeted/ Comparative Income Statement $ Budgeted Sales Revenue 100,000 Less : Budgeted Cost of Goods Sold Note 1. 65,000 Gross Margin 35,000 Budgeted Selling and Adminitration Expenses General and Administrative budgeted 30,000 Budgeted Profit before Tax (PBT) 5,000 Tax @40% 15000*40% 2,000 Budgeted Profit after Tax (PAT) 3,000 Working Note 1) Statement of Budgeted Cost of Goods Sold $ $ Material used in Production 15000 Direct Labour Cost 20000 Manufacturing overhead 20000 Total Manufacturng Cost 55000 Add : Beginning Work in Process Inventory 10000 Less : Ending Work in Process Inventory (5000) Cost of Goods Manufactured 60000 Add: Beginning Finished Goods Inventories 15000 Less :Ending Finished Goods Inventories (10000) Budgeted Cost of Goods Sold 65000 2. Capital Expenditure are not directly charge to the Income statement , Capital expenditure are the expenditure with future Benefit , and if incurre for purchase of Depreciable assets , then it amortised over the life of assets to Income statement by way of Depreciation . As nothing is Provided in Question relating to life or Depreciation . Assume capital expenditure is for non depreciable assets , hence no treatment will be given in Income Statement for capital Expenditure . 3. Selling and Administrative expenses are the after production expenses , and a Period cost , hence it does not include in Cost of Goods sold , but directly charge to Income Statement as Selling and Adminstrative expenses..

Sown below are the totals from period budgets of Terr…

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	Terrell Corporation Budgeted/ Comparative Income Statement
		$
Budgeted Sales Revenue		100,000
Less : Budgeted Cost of Goods Sold	Note 1.	65,000
Gross Margin		35,000
Budgeted Selling and Adminitration Expenses
General and Administrative budgeted		30,000
Budgeted Profit before Tax (PBT)		5,000
Tax @40%	15000*40%	2,000
Budgeted Profit after Tax (PAT)		3,000

Working Note

1) Statement of Budgeted Cost of Goods Sold

	$	$
Material used in Production	15000
Direct Labour Cost	20000
Manufacturing overhead	20000
Total Manufacturng Cost		55000
Add : Beginning Work in Process Inventory		10000
Less : Ending Work in Process Inventory		(5000)
Cost of Goods Manufactured		60000
Add: Beginning Finished Goods Inventories		15000
Less :Ending Finished Goods Inventories		(10000)
Budgeted Cost of Goods Sold		65000

2. Capital Expenditure are not directly charge to the Income statement , Capital expenditure are the expenditure with future Benefit , and if incurre for purchase of Depreciable assets , then it amortised over the life of assets to Income statement by way of Depreciation . As nothing is Provided in Question relating to life or Depreciation . Assume capital expenditure is for non depreciable assets , hence no treatment will be given in Income Statement for capital Expenditure .

3. Selling and Administrative expenses are the after production expenses , and a Period cost , hence it does not include in Cost of Goods sold , but directly charge to Income Statement as Selling and Adminstrative expenses.

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