Question

Ch 09 HW Financial information for BDS Enterprises for the year-ended December 31, 20xx, was gathered from an accounting intern, who has asked for your guidance on how to prepare an income statement format that will be distributed to management. Subtotals and totals are Included in the information, but you will need to calculate the values. Pretax income Gross profit Allocated costs (uncontrollable) Labor expense Sales Research and development (uncontrollable) Depreciation expense Net income/(loss) Cost of goods sold $2,030 41,580 189,000 320 18,000 119,079 1,260 Selling expense 790 Total expenses Marketing costs (uncontrollable) Administrative expense Income tax expense (21% of pretax income) Other expenses A. Prepare the income statement to include all costs, but separate out uncontrollable costs using the above information. Round your answers to the nearest dollar. BDS Enterprises Income Statement For the Year Ended December 31, 20xx

Answer 1

BDS Entes prises ancome statement the year einded December 31, 20xx Amount Amount Particulars $189,000 laboul Expenses $ 41,580) $ 119,070) Cost of goods sold Sales less $28.350 → Gross profit luss? Controllable Expenses! Depreciation selling Expenses Administration Exeo Other Expenses $18,000 $ 1,260 $ G80 $ 320 164 20,270) $ 8080 $ 2030 $ 320 $ 790 $3,140) $4,940 en un controllable Expen Ses'- Allocated Cost Research & development marketing Cost Pre tax an come → Wy! Income tan@. Net an come $1037.6) $3,872.6

a. Profit margin. Net profit – X100 Sales $3,872.6. $189.000 -X100 = 2.047. b. Return on Investment Net profit Cost of Investment - X100 $3,872.6 $ 100,000 -X100 = 3.877. c. Residual encome? = Net En Come – equily charge - $3,812.6 - C$100,000x410) = $ 3,879.6-($4000) $197.4

C. un Controllable Cost is included an ancome Slálé ment because these costa are responsi blity of each division manager option. B is correct Answer, Happy HomeworkLibing