Question

(The following information applies to the questions displayed below.) Below are amounts found in the income statements of three companies. Company Henry Grace James Sales Revenue $42,000 45,000 50,000 Cost of Goods Sold $10,500 29,700 29,000 Operating Expenses $ 5,500 16, 600 3,500 Non- operating Expenses $2,500 7,500 0 Income Tax Expense $2,500 3,500 Required: 1. For each company, calculate (a) gross profit, (b) operating income, (c) income before income taxes, and (d) amounts should be indicated by a minus sign.) Gross Profit Operating Income Income Before Income taxes Net Income! Loss Henry Grace James +

Answer 1

Answer:
Particulars	Henry	Grace	James
Sales Revenue	$ 42,000	$ 45,000	$ 50,000
Less: Cost of goods sold	($ 10,500)	($ 29,700)	($ 29,000)
Gross profit	$ 31,500	$ 15,300	$ 21,000
Less: Operating expenses	($ 5,500)	($ 16,600)	($ 3,500)
Operating Income	$ 26,000	($ 1,300)	$ 17,500
Less: Non-operating expenses	($ 2,500)	($ 7,500)	$ 0
Income before Income taxes	$ 23,500	($ 8,800)	$ 17,500
Less: Income tax	($ 2,500)	$ 0	($ 3,500)
Net Income / Loss	$ 21,000	($ 8,800)	$ 14,000