Question

Suppose in its income statement for the year ended June 30, 2022, The Clorox Company reported the following condensed data (dollars in millions).

Salaries and wages expenses		$ 449		Research and development expense		$ 109
Depreciation expense		90		Income tax expense		275
Sales revenue		5,619		Loss on disposal of plant assets		46
Interest expense		156		Cost of goods sold		3,060
Advertising expense		489		Rent expense		102
Sales returns and allowances		266		Utilities expense		57

Assume the marketing department has presented a plan to increase advertising expenses by $326 million. It expects this plan to result in an increase in both net sales and cost of goods sold of 25%. Assume a tax rate of 20%. (Hint: Increase both sales revenue and sales returns and allowances by 25%.)

Prepare a multiple-step income statement. (Round answers to 0 decimal places, e.g. 15,222.)

THE CLOROX COMPANY Income Statement choose the accounting period                                                                      For the Year Ended June 30, 2022June 30, 2022For the Month Ended June 30, 2022 (amounts in millions)
select an opening name for section one                                                                      DividendsNet Income / (Loss)Retained Earnings, July 1, 2008Retained Earnings, June 30, 2009Sales RevenuesTotal RevenuesNet SalesGross ProfitOperating ExpensesTotal Operating ExpensesIncome Before Income TaxesOther Revenues and GainsOther Expenses and LossesIncome From OperationsSales
enter an income statement item		$enter a dollar amount
select between addition and deduction                                                                      AddLess: enter an income statement item		enter a dollar amount
select a closing name for section one                                                                      DividendsNet Income / (Loss)Retained Earnings, July 1, 2008Retained Earnings, June 30, 2009Sales RevenuesTotal RevenuesNet SalesGross ProfitOperating ExpensesTotal Operating ExpensesIncome Before Income TaxesOther Revenues and GainsOther Expenses and LossesIncome From OperationsSales		enter a total amount for section one
enter an income statement item		enter a dollar amount
select a summarizing line for the first part                                                                      DividendsNet Income / (Loss)Retained Earnings, July 1, 2008Retained Earnings, June 30, 2009Sales RevenuesTotal RevenuesNet SalesGross ProfitOperating ExpensesTotal Operating ExpensesIncome Before Income TaxesOther Revenues and GainsOther Expenses and LossesIncome From OperationsSales		enter a total amount for the first part
select an opening name for section two                                                                      DividendsNet Income / (Loss)Retained Earnings, July 1, 2008Retained Earnings, June 30, 2009Sales RevenuesTotal RevenuesNet SalesGross ProfitOperating ExpensesTotal Operating ExpensesIncome Before Income TaxesOther Revenues and GainsOther Expenses and LossesIncome From OperationsSales
enter an income statement item	$enter a dollar amount
enter an income statement item	enter a dollar amount
enter an income statement item	enter a dollar amount
enter an income statement item	enter a dollar amount
enter an income statement item	enter a dollar amount
enter an income statement item	enter a dollar amount
select a closing name for section two                                                                      DividendsNet Income / (Loss)Retained Earnings, July 1, 2008Retained Earnings, June 30, 2009Sales RevenuesTotal RevenuesNet SalesGross ProfitOperating ExpensesTotal Operating ExpensesIncome Before Income TaxesOther Revenues and GainsOther Expenses and LossesIncome From OperationsSales		enter a total amount for section two
select a summarizing line for the second part                                                                      DividendsNet Income / (Loss)Retained Earnings, July 1, 2008Retained Earnings, June 30, 2009Sales RevenuesTotal RevenuesNet SalesGross ProfitOperating ExpensesTotal Operating ExpensesIncome Before Income TaxesOther Revenues and GainsOther Expenses and LossesIncome From OperationsSales		enter a total amount for the second part
select an opening name for section three                                                                      DividendsNet Income / (Loss)Retained Earnings, July 1, 2008Retained Earnings, June 30, 2009Sales RevenuesTotal RevenuesNet SalesGross ProfitOperating ExpensesTotal Operating ExpensesIncome Before Income TaxesOther Revenues and GainsOther Expenses and LossesIncome From OperationsSales
enter an income statement item	enter a dollar amount
enter an income statement item	enter a dollar amount
		enter a subtotal of the two previous amounts
select a summarizing line for the third part                                                                      DividendsNet Income / (Loss)Retained Earnings, July 1, 2008Retained Earnings, June 30, 2009Sales RevenuesTotal RevenuesNet SalesGross ProfitOperating ExpensesTotal Operating ExpensesIncome Before Income TaxesOther Revenues and GainsOther Expenses and LossesIncome From OperationsSales		enter a total amount for all three parts
enter an income statement item		enter a dollar amount
select a closing name for this statement                                                                      DividendsNet Income / (Loss)Retained Earnings, July 1, 2008Retained Earnings, June 30, 2009Sales RevenuesTotal RevenuesNet SalesGross ProfitOperating ExpensesTotal Operating ExpensesIncome Before Income TaxesOther Revenues and GainsOther Expenses and LossesIncome From OperationsSales		$enter a total net income or loss amount

Answer 1

THE CLOROX COMPANY Income Statement For the year ended June 30, 2022 (amounts in millions)
Net Sales [ ( $ 5,619 (-) $ 266 ) + 25% ]		$ 6,691
Less: Cost of goods sold               ( $ 3,060 + 25% )		($ 3,825)
Gross profit		$ 2,866
Less: Operating expenses
- Salaries and wages expenses	$ 449
- Depreciation expense	$ 90
- Advertising expense                   ( $ 489 + $ 326 )	$ 815
- Research and development expense	$ 109
- Rent expense	$ 102
- Utilities expense	$ 57
Total Operating Expense		($ 1,622)
Income from Operations		$ 1,244
Other Expenses and Losses
- Loss on Disposal of Plant Assets	($ 46)
- Interest expense	($ 156)
		($ 202 )
Income before Income tax		$ 1,042
Less: Income tax expense               ( $ 1,042 x 20% )		($ 208)
Net income/ Loss		$ 834