Boreal Bikes’ 2026 budget drivers: 12,000 bikes at 450 each; cost of goods sold 55 % of revenue; fixed operating costs 1,500,000; depreciation 200,000; interest 70,000; income tax 26 % of income before tax. Build the budgeted income statement.
Boreal Bikes’ 2026 budget drivers: 12,000 bikes at 450 each; cost of goods sold 55 % of revenue; fixed operating costs 1,500,000; depreciation 200,000; interest 70,000; income tax 26 % of income before tax. Build the budgeted income statement.
Answer
Revenue → 5400000 · Cost of goods sold → 2970000 · Gross profit → 2430000 · EBIT → 730000 · Income tax → 171600 · Net income → 488400
Cells - Revenue · ±0 - Cost of goods sold · ±0 - Gross profit · ±0 - EBIT · ±0 - Income tax · ±0 - Net income · ±0 Revenue 12,000 × 450 = 5,400,000; COGS 0.55 × 5,400,000 = 2,970,000; gross profit 2,430,000; EBIT = 2,430,000 − 1,500,000 − 200,000 = 730,000; income before tax = 730,000 − 70,000 = 660,000; tax 0.26 × 660,000 = 171,600; net income 488,400. Excel: `=B2*B3` for revenue, `=B4*0.55` for COGS, `=B9*0.26` for tax.
Hermanson Vol 2 ch 23; OpenStax Accounting v2 §7.2–7.3; Bigel ch 8