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carminedog139Lv1

28 Sep 2019

Vertical Analysis. Refer to the information of Cuneo Company above. 1- Prepare a common-size income statement for year 1, 2 and 3 by expressing each line item as a percentage of sale revenue. Cuneo Company Income Statements For years 1, 2, and 3 Year 1: Sales: $1,000,000 Less: Cost of goods sold: (700,000) Gross margin: $300,000 Less operating expenses: Selling expenses: (150,000) Administrative expenses: (50,000) Operating income: $100,000 Less: Interest expenses: (25,000) Income before taxes: $75,000 Year 2: Sales:$1,200,000 Less: Cost of goods sold: (700,000) Gross margin: $500,000 Less operating expenses: Selling expenses: (220,000) Administrative expenses:(60,000) Operating income:220,000 Less: Interest expenses: (25,000) Income before taxes: $195,000 Year 3: Sales: $1,700,000 Less: Cost of goods sold: (1,000,000) Gross margin: $700,000 Less operating expenses: Selling expenses: (250,000) Administrative expenses:(120,000) Operating income: $330,000 Less: Interest expenses: (25,000) Income before taxes: $305,000

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Lelia LubowitzLv2

28 Sep 2019

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Plyler Enterprises sells garage doors in Erie, PA and hasprovided the following information:

# of unitssold 15,000

Average sellingprice $25per unit

Variable sellingexpense $5per unit

Variable administrativeexpense $2.50per unit

Fixed sellingexpenses $50,000

Fixed Administrativeexpenses $30,000

Inventory atbeginning $32,000

Inventory atend $50,000

Inventorypurchases $152,000

1. Provide the figures for the TRADITIONAL income statementbelow for Plyler Enterprises (ignore taxes):

Account	Amount	Show Calculations
Sales
Cost of goods sold
Gross margin		Sales less cost of goods sold
Selling expenses
Administrative expenses
Net operating income		Gross margin less Selling and Administrative

2. Provide the figures for the CONTRIBUTION FORMAT incomestatement below for Plyler Enterprises (ignore taxes):

Account	Amount	Show Calculations
Sales
Variable expenses:
Cost of goods sold
Selling expenses
Administrative exp.
Contribution margin		Sales less variable expenses
Fixed expenses:
Selling expenses
Administrative exp.
Net operating income		Sales less variable and fixed expenses

coralleopard451

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