Question

FULL SCRI CES Exercise 5-10 (Part Level Submission) Suppose In Its Income statement for the year ended June 30, 2022, The Clorox Company reported the following condensed data (dollars in millions). $ 460 90 Salaries and wages expenses Depreciation expense Sales revenue Interest expense Advertising expense Sales returns and allowances 8,230 161 499 230 Research and development expense Income tax expense Loss on disposal of plant assets Cost of goods sold Rent expense Utilities expense $ 114 838 46 4,000 105 60 Assume a tax rate of 34%.

Answer 1

Solution Planned Situation Amount Amount 10,287.50 287.50 10,000.00 5,000.00 5,000.00 The Clorox Company Income Statement For the year ended 30 June, 2022 (Amount in Millions) Present Situation Amount Amount Sales Sales Revenue 8,230.00 Sales Returns & allowance 230.00 8,000.00 Cost of Goods Sold 4,000.00 Gross Profit 4,000.00 Operating Expenses Advertising Expenses 499.00 Salaries & Wages 460.00 Reserch and Development Expenses 114.00 Rent Expenses 105.00 Depreciation 90.00 Utility Expenses 60.00 Total Opearting Expenses 1,328.00 Income From Operation 2,672.00 Other Expenses & Losses Interest Expenses 161.00 Loss on Disposal of Plant Assets 46.00 207.00 Income Before Income Tax 2,465.00 Income Tax Expense 838.00 Net Income/(Loss) 1,627.00 839.00 460.00 114.00 105.00 90.00 60.00 1,668.00 3,332.00 161.00 46.00 207.00 3,125.00 1,062.50 2,062.50 Comment: It clear from the siatuation that planed scenario increase the net income, so the planned scenario should be implemented to maximise the profit.