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Creating a Pro-forma income statement for manufacturing

Pro-Forma Income Statement
Gamma Manufacturing, Inc., is a manufacturer of electric pencil sharpeners. The following is information regarding Gamma Manufacturing for the fiscal year-end, May 31, 2009:

Beginning finished goods inventory . . . . . . $ 51,000
Ending finished goods inventory . . . . . . . . .48,000
Interest expense . . . . . . . . . . . . . . . . 29,000
Selling and administrative expenses . .. . . . . 69,000
Sales revenue . . . . . . . . . . . . . . . . . 445,000
Direct materials used . . . . . . . . . . . . . 57,000
Direct labor . . . . . . . . . . . . . . . . . . 62,000
Manufacturing overhead . . . . . . . . . . . . . 33,000

***Assume a tax rate of 33%. Prepare a pro-forma income statement for the year ended May 31,2009, for Gamma Manufacturing, Inc. (Note that Gamma Manufacturing does not have workin-process inventory.)

Solution Preview

The trick of this problem is calculating the Cost of Goods sold.

Take the Beginning Inventory, and add material ...

Solution Summary

Calculating cost of goods sold for a manufacturing company and creating a pro-forma income statement.

$2.19