Use your knowledge of income statements to fill in the missing items below. Answ

Question

Use your knowledge of income statements to fill in the missing items below. Answers: Enter the answers in blue shaded cells Sales ? COGS 575,000 Gross profit $1,600,000 G&A expense 200,000 Sales & Mkting expense ? Depreciation 50,000 Operating income ? Interest 100,000 Income before taxes ? TIP: first determine Income before taxes and operating income Income taxes (30%) Net income $700,000
Use your knowledge of income statements to fill in the missing items below. Answers: Enter the answers in blue shaded cells Sales ? COGS 575,000 Gross profit $1,600,000 G&A expense 200,000 Sales & Mkting expense ? Depreciation 50,000 Operating income ? Interest 100,000 Income before taxes ? TIP: first determine Income before taxes and operating income Income taxes (30%) Net income $700,000

Explanation / Answer

Income tax is 30% on income before taxes so net income is 70% of income before taxes

Thus, Income before tax = 700000*100/70

Income before tax= $1000000

Now sales-COGS=Gross Profit

Sales= Gross profit+COGS

Sales= 1,600,000+575,000

Sales=$2175000

Operating income-interest= Income befroe tax

Opertaing income= Interest+IBT

                         =100000+1000000

                    Opertaing income=     $1100000

Now, Gross profit- G&A expense-Sales & Mkting expense-Depreciation= Operating income

    1,600,000-200,000-Sales & Mkting expense-50000=1100000

Sales & Mkting expense=$250000

Related Questions

Navigate

• Browse (All)
• Browse U
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.