problem 39 noventis corporation prepared the following estimates 500849

Segment interim reporting
Problem 39
	Noventis Corporation prepared the following estimates for the four quarters of the current year:
		First Qt	Second QT	Third qt	Fourth QT
	Sales	10,00,000.00	12,00,000.00	14,00,000.00	16,00,000.00
	COGS	4,00,000.00	4,80,000.00	5,50,000.00	6,00,000.00
	Admisnitrative costs	2,50,000.00	1,55,000.00	1,60,000.00	1,70,000.00
	Advertising cost	–	1,00,000.00	–	–
	executive bonuses	–		–	80,000.00
	Provision for bad debts	–		–	52,000.00
	Annual maintenance costs	60,000.00		–	–


Aditional information
	1) First quarter admisnitrative costs include 100,000 annual insurance premium
	2) Advertisement costs paid in the second quarter relate to television advertisements
	that will be broadcast throughout the entire year.
	3) No special items affect income during the year.
	4) Noventis estimates an effective income tax rate for the year of 40%

	a) Assuming that actual results do not vary from the estimates provided, determine
	the amount of income to be reported each quarter of the current year.

	b) Assume that actual results do not vary from the estimates provided except for that in the third
	quarter, the estimated annual effective income tax rate is revised downward to 38%.
	Determine the amount of income to be reported each quarter of the current year.