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Micro Chip's Consolidation Statement of Operations

Consider micro chip's consolidation statement of operations for the year ended Sept. 25, 2004 and answer questions 1 and 2.

1. Use the percentage sales method and a 20% increase in sales to forecast micro chip's consolidated statement of operations for the period Sept. 26, 2004- Sept. 25, 2005. Assume a 15% tax rate for the period and restructuring costs of 2% of the new sales figure.
2. Discuss your results from question #1. What assumptions have you made? Do any of your assumptions seem reasonable? I just need help I am confused.

Consolidated statements of operations for the period Sept. 26, 2003 through Sept 25, 2004.
Sales=$8,334.00
Cost of sales=$5,458.00
Gross margin=$2,876.00
Operating expenses=0
R & D= $525.00
Selling, General, and administrative=$691.00
In process R & D=---------
Restructuring costs=-------
Total operating Exp=$1,216.00
Operating income=$1,660.00
Total interest and other income net=$194.00
Income before provision for income taxes=$1,854.00
Provision for income taxes =$278.00
Net income=$1,575.90

Solution Summary

The solution shows how a forecast of sales can be obtained based on a consolidation statement of operations and the percentage sales method.

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