Question: What would an executive summary cover in which you explain how outsourcing would impact the pro-forma income statement?
Schedule:
Sunbird Boat Company
Pro-Forma Income Statement
For the Year Ended December 31, 2009
Sales revenue (Schedule 1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$1,000,000
Cost of goods sold (Schedule 16) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (500,000)
Gross margin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 500,000
Selling and administrative expense (Schedule 7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .(406,000)
Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 94,000
Interest expense (Schedule 15) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,500)
Net income before tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 92,500
Income taxes (40% average tax rate) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (37,000)
Net income after tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 55,500