question archive Use this information to prepare a financial statement for company ABC Co for the 12 months ended 31st December 2019 Distribution expenses $ 8,000 Salaries and wages related to selling product $ 16,000 Advertisements and promotions for Product $ 5,000 Salaries and wages for administrative staff $ 7,500 Office supplies expenses $ 1500 administrative utility expenses $ 3000 Depreciation on office equipment $ 750 Interest expense $ 1500 Cost of direct material purchase for product Alpha $ 165,000 Cost of stock at the beginning of the period Alpha $ 15,000 Cost of stock at the end of the period Alpha $ 20,000 Revenue from sale of Product Alpha $ 312,500 Based on the above information prepare a basic financial statement and identify the following
Use this information to prepare a financial statement for company ABC Co for the 12 months ended 31st December 2019 Distribution expenses $ 8,000 Salaries and wages related to selling product $ 16,000 Advertisements and promotions for Product $ 5,000 Salaries and wages for administrative staff $ 7,500 Office supplies expenses $ 1500 administrative utility expenses $ 3000 Depreciation on office equipment $ 750 Interest expense $ 1500 Cost of direct material purchase for product Alpha $ 165,000 Cost of stock at the beginning of the period Alpha $ 15,000 Cost of stock at the end of the period Alpha $ 20,000 Revenue from sale of Product Alpha $ 312,500 Based on the above information prepare a basic financial statement and identify the following
Subject:AccountingPrice:2.87 Bought7
Use this information to prepare a financial statement for company ABC Co for the 12 months ended 31st December 2019
Distribution expenses $ 8,000
Salaries and wages related to selling product $ 16,000
Advertisements and promotions for Product $ 5,000
Salaries and wages for administrative staff $ 7,500
Office supplies expenses $ 1500
administrative utility expenses $ 3000
Depreciation on office equipment $ 750
Interest expense $ 1500
Cost of direct material purchase for product Alpha $ 165,000
Cost of stock at the beginning of the period Alpha $ 15,000
Cost of stock at the end of the period Alpha $ 20,000
Revenue from sale of Product Alpha $ 312,500
Based on the above information prepare a basic financial statement and identify the following.
i. Gross Profit
ii. Total operating expenses (Show separately your selling distribution expenses and administrative expenses)
iii. Operating income
iv. Net income (Assume your business is taxed at 4%)
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Answer:
| Income Statement of Company ABC | |||
| Particulars | Amount | Amount | Amount |
| Sales Revenue | $312,500 | ||
| Cost of Sales | |||
| Beginning Stock | $15,000 | ||
| Add Purchases of stock | $165,000 | ||
| Less Ending Stock | ($20,000) | ||
| ($160,000) | |||
| Gross Profit | $152,500 | ||
| Operating Expenses | |||
| Sellinga nd Distribution Expenses | |||
| Salaries and wages | $16,000 | ||
| Advertisements and Promotions | $5,000 | ||
| Distribution expenses | $8,000 | ||
| $29,000 | |||
| Administrative Expenses | |||
| Salaries and wages | $7,500 | ||
| Office Supplies | $1,500 | ||
| Utilities | $3,000 | ||
| Depreciation | $750 | ||
| $12,750 | |||
| Total Operating Expenses | ($41,750) | ||
| Operating Income | $110,750 | ||
| Non-Operating Expenses | |||
| Interest Expense | ($1,500) | ||
| Net Income before taxes | $109,250 | ||
| Income Tax @ 4% | ($4,370) | ||
| Net Income after Taxes | $104,880 |
i. Gross Profit is $ 152,500
ii. Total operating expenses are $41,750
iii. Operating income is $110,750
iv. Net income after tax is $104,880
