Question

Suppose ABC Company is introducing a new product. They expect to sell 1,000 units per year at a price of $70 for five years. Costs of goods sold are estimated to be 65% of sales, fixed costs will be $3,000 per year and depreciation will be $10,000 per year. If the tax rate is 21%, construct a proforma income statement in Excel.

Answer 1

ABC Company:
PROFORMA INCOME STATEMENT :
Units sold	1000 units
	Amounts $		Calculation
Sales Revenue	70000		1000*70
Less: Cost of Goods Sold	45500		1000*(70*0.65)
Gross Profit	24500
Less: Expenses:
Fixed Costs	3000
Depreciation	10000
Total expenses	13000
Income before tax	11500
Less: Tax @21%	2415		11500*0.21
Net Income	9085