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    Preparing an Income statement.

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    The cash budget for Parker Process Meats, Inc. for the fourth quarter of 2004 is given below:

    Parker Process Meats, Inc.
    Cash Budget for the Three Months Ending December 31, 2004
    Cash receipts Oct. Nov. Dec.
    Total collections $31,050 $ 4,050 $49,950
    Cash disbursements:
    Purchases 44,550 48,600 52,650
    Wages and salaries 7,425 7,425 7,425
    Other expenses 2,025 1,350 675
    Taxes 17,415
    Total disbursements $54,000 $57,375 $78,165
    The expected sales for the period are as follows:
    Oct.: $86,400 Nov.: $91,800 Dec.: $83,700
    The total depreciation expense for the period will be $8,775. An interest payment on outstanding debt of $15,000 will be made in December. Using the information given, construct a pro forma income statement for the final quarter of 2004 for Parker.

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    Solution Summary

    The problem requires that an income statement be prepared from provided information.