ACT 205 Lecture Notes - Lecture 14: Gross Profit, Earnings Before Interest And Taxes, Income Statement

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skykangaroo617

8 Mar 2018

School

CSU

Department

Accounting

Course

ACT 205

Professor

Sally Plasterer Whitney

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Document Summary

Difference between revenue and cost of goods sold. The total cost of merchandise sold during the period. Net sales revenue - cost of goods sold = gross profit - operating e. Gross profit - operating expenses = operating income. Operating income +/- nonoperating revenues and expenses = income before. Income before income taxes - income tax expense = net income. Net sales revenue sales revenue minus discounts and returns. Revenues and expenses not related to primary business operations. (interest expenses and revenues; gains and losses on the sale of pp&e) Matches each unit of inventory with its actual cost. Assumes first units purchased are the first ones that are sold. Assumes last units purchased are first ones sold. To presume the order in which goods are sold even if flow of costs is unrelated to the physical flow of goods. Both cost of goods sold and ending inventory consist of a random mixture of all the goods available for sale.

Related Questions

i have to read these following income statements and write a paragraph on it.

Your Company Name here
CONDENSED MULTISTEP INCOME STATEMENT
	Date

	Most recent year	Year	Year
($ in millions)
	12/31/16	12/31/15	12/31/14
Sales Revenue	41,490,000.00	39,678,000.00	36,918,000.00
Cost of Goods Sold	6,933,000.00	6,638,000.00	6,262,000.00
Gross Profit	34,557,000.00	33,040,000.00	30,656,000.00
Operating Expenses	28,359,000.00	27,075,000.00	25,091,000.00
Operating Income	6,198,000.00	5,965,000.00	5,565,000.00
Nonoperating revenues and expenses	1,388,000.00	1,388,000.00	1,388,000.00
Income before Income tax	4,810,000.00	4,577,000.00	4,177,000.00
Provision for Income tax	1,378,000.00	1,261,000.00	1,108,000.00
Income from continuing operations	3,432,000.00	3,316,000.00	3,069,000.00
Nonrecurring items	542,000.00	1,187,000.00	1,194,000.00
NET INCOME	2,890,000.00	2,129,000.00	1,875,000.00
Earnings per share	7.3	4.99	4.16



Your Company Name here
CONDENSED TREND ANALYSIS INCOME STATEMENT
	Date

	Most recent year	Year	Year
($ in millions)
	2016	2015	2014
Sales Revenue	112.38%	107.48%	100.00%
Cost of Goods Sold	110.72%	106.00%	100.00%
Gross Profit	112.73%	107.78%	100.00%
Operating Expenses	113.02%	107.91%	100.00%
Operating Income	111.37%	107.19%	100.00%
Nonoperating revenues and expenses	100.00%	100.00%	100.00%
Income before Income tax	115.15%	109.58%	100.00%
Provision for Income tax	124.37%	113.81%	100.00%
Income from continuing operations	111.83%	108.05%	100.00%
Nonrecurring items	45.39%	99.41%	100.00%
NET INCOME	154.13%	113.55%	100.00%
Earnings per share	175.48%	119.95%	100.00%



Your Company Name here
CONDENSED COMMON SIZE INCOME STATEMENT
	Date

	Most recent year	Year	Year
($ in millions)
	2016	2015	2014

Sales Revenue	100.00%	100.00%	100.00%
Cost of Goods Sold	16.71%	16.73%	16.96%
Gross Profit	83.29%	83.27%	83.04%
Operating Expenses	68.35%	68.24%	67.96%
Operating Income	14.94%	15.03%	15.07%
Nonoperating revenues and expenses	3.35%	3.50%	3.76%
Income before Income tax	11.59%	11.54%	11.31%
Provision for Income tax	3.32%	3.18%	3.00%
Income from continuing operations	8.27%	8.36%	8.31%
Nonrecurring items	1.31%	2.99%	3.23%
NET INCOME	6.97%	5.37%	5.08%
Earnings per share	0.00%	0.00%	0.00%

maroonporpoise912

WITH THE INFORMATION PROVIDE WRITE A FINANCE REPORT OF INCOMESHEET PFIZER 2015,2014,2013

	Your Company Name here		PFIZER INC
	CONDENSED MULTISTEP INCOME STATEMENT
		Date	5-Nov-16

			Most recent year	Year	Year
($ in millions)			2015	2014	2013

Sales Revenue			48,851.00	49,605.00	51,584.00
Cost of Goods Sold			9,648.00	9,577.00	9,586.00
Gross Profit			39,203.00	40,028.00	41,998.00
Operating Expenses			728.00	935.00	1,011.00
Operating Income			11,824.00	13,249.00	15,184.00
Nonoperating revenues andexpenses			2,859.00	1,009.00	532.00
Income before Income tax			8,965.00	12,240.00	15,716.00
Provision for Income tax			1,990.00	3,121.00	4,306.00
Income from continuingoperations			14,512.00	-2,980.00	-10,233.00
Nonrecurring items			1,152,000	250,000.00	1,182,000.00
NET INCOME			6,960.00	9,135.00	22,003.00
Earnings per share			1.24	1.42	3.19



	Your Company Name here		PFIZER
CONDENSED TREND ANALYSISINCOME STATEMENT
		Date

			Most recent year	Year	Year
($ in millions)
			2015	2014	2013
Sales Revenue			95%	96%	100.00%
Cost of Goods Sold			101%	100%	100.00%
Gross Profit			93%	95%	100.00%
Operating Expenses			72%	92%	100.00%
Operating Income			78%	87%	100.00%
Nonoperating revenues andexpenses			537%	190%	100.00%
Income before Income tax			57%	78%	100.00%
Provision for Income tax			46%	72%	100.00%
Income from continuingoperations			-142%	29%	100.00%
Nonrecurring items			97%	21%	100.00%
NET INCOME			32%	42%	100.00%
Earnings per share			39%	45%	100.00%



	Your Company Name here		PFIZER
	CONDENSED COMMON SIZE INCOME STATEMENT
		Date

			Most recent year	Year	Year
($ inmillions)
			2015	2014	2013

Sales Revenue			100.00%	100.00%	100.00%
Cost of Goods Sold			19.75%	19%	19%
Gross Profit			80.25%	81%	81%
Operating Expenses			1.49%	2%	2%
Operating Income			24.20%	27%	29%
Nonoperating revenues andexpenses			5.85%	2%	1%
Income before Income tax			18.35%	25%	30%
Provision for Income tax			4.07%	6%	8%
Income from continuingoperations			29.71%	-6%	-20%
Nonrecurring items			2358.19%	504%	2291%
NET INCOME			14.25%	18%	43%
Earnings per share			0.00%	0%	0%

chocolategerbil484

Use the following information to answer the questions below.

CATERPILLAR INC. Statement of Income for a Recent Year

Total sales and revenues......................................................................................$55,184,000

Less: Cost of products sold...................................................................................$40,391,000

Gross profit.......................................................................................,....................$ 14,793,000

Less: Operating costs :

Selling, general, and administrative expenses................................................ $ 5,697,000

Research and development expenses............................................................$2,135,000

Other operating expenses...............................................................................$1,633,000

Total operating costs.............................................................................................$ 9,465,000

Operating profit.....................................................................................................$ 5,328,000

Less: Other expenses............................................................................................245,000

Consolidated profit before taxes..........................................................................$ 5,083,000

Provision for income taxes....................................................................................1,380,000

Profit of consolidated companies.........................................................................$ 3,703,000

WAL-MART STORES, INC.

Statement of Income for a Recent Year Value

Total revenues.......................................................................................................$485,651,000

Less: Cost of sales.................................................................................................$365,086,000

Gross profit............................................................................................................$120,565,000

Less: Operating, selling, general. and administrative expenses......................... 93,418,000

Operating income.................................................................................................$ 27,147,000

Less: Interest expense, net...................................................................................2,348,000

Income from continuing operations before income taxes................................... $ 24,799,000

Provision for income taxes....................................................................................(7 ,985,000)

Income from discontinued operations, net of tax................................................ 285,000

Consolidated net income......................................................................................$ 17,099,000

SOUTHWEST AIRLINES CO.

Statement of Income for a Recent Year

Operating revenue:

Passenger.........................................................................................................$ 17,658,000

Freight...............................................................................................................175,000

Other.................................................................................................................772,000

Total operating revenue...................................................................................$ 18,605,000

Less: Operating expenses:

Salaries, wages, and benefits..........................................................................$ 5,434,000

Fuel and oil.......................................................................................................5,293,000

Maintenance materials and repairs.................................................................978,000

Aircraft rentals...................................................................................................295,000

Landing fees and other rentals........................................................................1,111,000

Depreciation and amortization.........................................................................938,000

Acquisition and integration..............................................................................126,000 .

Other operating expenses...............................................................................2,205,000

Total operating expenses.................................................................................$ 16,380,000

Operating income.................................................................................................$ 2,225,000

Other expenses (income):

Interest expense...............................................................................................$ 130,000

Capitalized interest...........................................................................................(23,000)

Interest income.................................................................................................(7,000)

Total other expenses (income).........................................................................$ 409,000

Income before income taxes................................................................................$ 1,816,000

Provision for income taxes....................................................................................680,000

Net income............................................................................................................$ 1, 136,000

ANSWER THESE QUESTIONS USING THE ABOVE INFORMATION:

1. List the major differences between the income statementsshown for Catepillar Inc., Walmart and Southwest

2. Explain how cost-accounting data were used to prepare theseincome statements.

3. On the income statement for where would the ticket agents'salaries be shown? Where would the costs of the computer equipmentused to keep track of reservations be included on thestatement?

4. On the income statement for where would the cost of newspaperadvertising be shown? How about the cost of merchandise?

5. Where would the salary of the brand manager who plansadvertising for equipment be shown? How about the salary of aproduction employee? Where would the cost of the raw materials usedin the company's products be included on the statement?

sapphireherring638

ACT 205 Lecture Notes - Lecture 14: Gross Profit, Earnings Before Interest And Taxes, Income Statement

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