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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.

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