Last Year, a Firm Had Net Income of $46,500 Last

question 92

Multiple Choice

Last year, a firm had net income of $46,500 last year on sales of $326,000. Sales are expected to be $365,120 next year. This firm uses the percentage of sales approach when compiling pro forma statements. What will be the projected net income?

• A) $50,137
• B) $52,080
• C) $55,987
• D) $59,876
• E) $67,890

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Definitions:

Unrealised Profit

Profit that has been generated but not yet realized through a transaction, such as an increase in value of an investment that has not yet been sold for cash.

Opening Inventory

The value of a company's inventory at the beginning of an accounting period, which is carried over from the end of the previous period.

Tax Effect

The impact of tax laws and regulations on an individual's or company's financial decisions and situations, including the calculation of tax liabilities.

Carrying Amount

The value at which an asset is recognized in the balance sheet after accounting for depreciation, amortization, and impairment losses.