question archive A) Common - Size Income Statement You are asked by the bookkeeper of Matibay Company to analyze its financial performance
A) Common - Size Income Statement You are asked by the bookkeeper of Matibay Company to analyze its financial performance
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A) Common - Size Income Statement
You are asked by the bookkeeper of Matibay Company to analyze its financial performance. It has a profit percentage for the year of 30% after deducting a 30% tax from Net income before tax. The 40% cost of sales amounted to P482,000, and the Operating expenses represented 17% of the gross sales. Determine the following:
1. Gross sales
2. Gross profit
3. Net income before tax
4. The income tax amounts to
5. The net income for the period amounts to
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1) Gross Sales = P1,205,000
2) Gross Profit = P723,000
3) Net income before tax = P518,150
4) Income tax amount = P155,445
5) Net Income = P362,705
Step-by-step explanation
Gross Sales = Cost of sales/Percentage of cost of sales
= P482,000/40%
= P1,205,000
Operating Expense = Gross Sales * Operating expense percentage
= P1,205,000 * 17%
= P204,850
1) Gross Sales = P1,205,000
2) Gross Profit = Gross Sales - Cost of Sales
= P1,205,000 - P482,000
= P723,000
3) Net income before tax = Gross Profit - Operating Expense
= P723,000 - P204,850
= P518,150
4) Income tax amount = Net Income before tax * Tax Rate
= P518,150 * 30%
= P155,445
5) Net Income = Net income before tax - Income tax amount
= P518,150 - P155,445
= P362,705
