The following financial information was summarized from the accounting records o
ID: 2537353 • Letter: T
Question
The following financial information was summarized from the accounting records of Toys Corporation for the current year ended December 31:
Dolls
Division
Action Figures
Division
Corporate
Total
Cost of goods sold
$47,200
$30,720
Direct operating expenses
27,200
20,040
Sales
108,000
78,000
Interest expense
$2,040
General overhead
18,160
Income tax
4,700
Determine the gross profit for each division, the income from operations for each division, and the net income for the entire corporation?
(Show Work)
Dolls
Division
Action Figures
Division
Corporate
Total
Cost of goods sold
$47,200
$30,720
Direct operating expenses
27,200
20,040
Sales
108,000
78,000
Interest expense
$2,040
General overhead
18,160
Income tax
4,700
Explanation / Answer
Determine the gross profit for each division, the income from operations for each division, and the net income for the entire corporation
DollsDivision Action Figures
Division Corporate
Total Sales 108000 78000 186000 Less: Cost of goods sold (47200) (30720) (77920) Gross profit 60800 47280 108080 Less: Direct operating expenses (27200) (20040) (47240) Income from operation 33600 27240 60840 Less: Interest expense (2040) Less: General overhead (18160) Income before tax 40640 Less: Income tax (4700) Net Income 35940
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