Pro forma income statement

timer Asked: Aug 25th, 2015

Question Description

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: 30%

  • Fixed Costs: $125,000

  • Income taxes: 15%

  • Interest Expense: $200,000

  • In year 2, Price per unit increases to $11.50, and unit of sales increases by 5%, all other assumptions remain the same.

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