Question

DE Full Income Statement Exercise Create a Full Income Statement using the Given Information Given Information Income Statement ** Net Revenues Cost of Goods Sold Gross Profit 958, 100 431,145 526,955 round to nearest dollar using excel's ROUND() functi 7 Gross Revenues 8 Returns and Allowances 9 Sales Discounts 10 COGS Ratio 11 Depreciation 12 SG&A 13 Other operating expenses 14 Misc. other income 15 Misc. other losses 16 Tax rate 17 Common Shares Authorized 18 Common Shares Issued 19 Common Shares Outstanding SG&A Expenses Depreciation Other operating expenses Operating Income Order from largest to smallest expense 985,000 5,250 21,650 45.0% 65,000 185,000 23,600 1,000 850 24.0% 100,000 75,000 71,000 185,000 65,000 23,600 273,600 | Misc. other income Misc. other losses EBIT Order from largest absolute value to smallest 1,000 850 1,850 20 28,940 refer to your calculation Interest Expense Taxable income 400,000 6.0% 21 Mortgage on Buildings 22 Interest Rate on Mortgage 23 24 Bonds Payable 25 Interest Rate on Bonds round to nearest dollar using excel's =ROUND() function Net Income 100,000 4.5% 26 round to nearest cent using excel's =ROUND() function Earnings Per Share Operating Cash Flow 1 65,000 Average Short-term debt Interest Rate on ST Debt 20,000 2.2% 27 28 29 30 31 round to nearest dollar using excel's EROUND() function Calculate Interest Expense: Refer to this calculation on the Income Statement 33 34 35 36 Cost of Goods Sold as a percentage of Net Revenues Gross Profit = Revenues-COGS SG&A is Selling, General and Administrative Expenses Net Revenues are Gross Revenues less any sales discounts, returns, and allowances. 37 38 ** Enter all numbers as positive numbers, and either add or subtract in the subtotals and total calculations

Answer 1

Full Income Statement Exercise
Create a Full Income Statement using the Given Information
Given Information			Income Statement
Gross Revenues	985,000		Net Revenues	958,100
Returns and Allowances	5,250		Cost of Goods Sold	431,145
Sales Discounts	21,650		Gross Profit	526,955
COGS Ratio	45.0%
Depreciation	65,000		SG&A Expenses	185,000
SG & A	185,000		Depreciation	65,000
Other operating expenses	23,600		Other operating expenses	23,600
Misc. other income	1,000		Operating Income	253,355
Misc. other losses	850
Tax rate	24.0%		Misc. other income	1,000
Common Share Authorized	100,000		Misc. other losses	(850)
Common Share Issued	75,000		Other Income	150
Common Share Outstanding	71,000
			EBIT	253,505
Mortgage on Building	400,000		Interest Expense	28,940
Interesr Rate on Mortgage	6.0%		Taxable Income	224,565
Bonds Payable	100,000		Tax	53,896
Interest Rate on Bonds	4.5%		Net Income	170,669
Average Short-term debt	20,000		Earnings per share	2.40
Interest Rate on ST Debt	2.2%		Operating Cash Flow	264,459
Working Notes
Calculation of Interest Expense
Mortgage on Building	400,000	6.00%	24,000
Bonds Payable	100,000	4.50%	4,500
Average Short-term debt	20,000	2.20%	440
	520,000		28,940
Earnings per Share = Net Income/ Common Shares Outstanding
= $ 170,669/71,000
= $ 2.40
Operating Cash Flow
	Amount	Amount
Income before tax		224,565
Add:
Misc. other losses	850
Depreciation	65,000
Interest	28,940	94,790
		319,355
Less:
Misc. other income	1,000
Taxes	53,896	54,896
Operating Cash Flow		264,459