Question

The income statement for California Communications follows. Assume California Communications signed a 3-month, 9%, $3,000 note on June 1, 2018, and that this was the only note payable for the company. ck the icon to view the income statement.) Requirements 1. Fill in the missing information for California's year ended July 31, 2018, income statement. Round to the nearest dollar. 2. Compute the times-interest-earned ratio for the company. Round to two decimals. Requirement 1. Fill in the missing information for California's year ended July 31, 2018, income statement. Round to the nearest dollar. (Use a 12-month year for interest computations. Use a minus sign or parentheses to enter other expenses.) California Communications Income Statement Year Ended July 31, 2018 Net Sales Revenue $ 21,800 (14,000) Cost of Goods Sold Gross Profit 7,800 Enter any number in the edit fields and then click Check Answer.

Answer 1

Calculate interest for 2months: $3000 x 9% x 2/12

=$45

Table showing calculation

Particulars	($)	($)
Net sales revenue		21800
cost of goods sold		(14000)
gross profit		7800
operating expenses:
selling expenses	720
administrative expenses	1650
total operating epenses		(2370)
operating income		5430
other income(expenses)
interest expense	(45)
total other income and (expenses)		(45)
net income before income tax expense		5385
income tax expense		(1080)
net income		4305