Given the following income statment , determine the orgnization operating cash flow for the period
INCOME STATEMENT FOR YEAR ENDING 20XX
SALES
$4,500,000
COST OF GOODS SOLD
$3,400,000
$1,100,000
EXPENSES
200,000
DEPRECIATION
400,000
PROFIT BEFORE TAX
$500,000
TAX
$300,000
PROFIT AFTER TAX
$200,000
DIVIDENDS
50,000
RETAINED EARNING
$150,000
Given the following income statment , determine the orgnization operating cash flow for the period
INCOME STATEMENT FOR YEAR ENDING 20XX |
|
SALES |
$4,500,000 |
COST OF GOODS SOLD |
$3,400,000 |
$1,100,000 |
|
EXPENSES |
200,000 |
DEPRECIATION |
400,000 |
PROFIT BEFORE TAX |
$500,000 |
TAX |
$300,000 |
PROFIT AFTER TAX |
$200,000 |
DIVIDENDS |
50,000 |
RETAINED EARNING |
$150,000 |
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Marion has just received the year-end financial statements shown below. Evaluate the state of her company from the perspective of shareholders. What should Marion conclude based on this, and what possible actions can be recommended? | ||||||
Marion's, Inc. | ||||||
Income Statement | 2012 | Cash Flow Statement | ||||
Revenue | $3,906,000 | Balance Forward | $212,500 | |||
Returns, Credits, etc. | ($1,400) | Net Income | $124,480 | |||
Net Sales (Revenue) | $3,904,600 | Depreciation | $75,000 | |||
Direct Costs | Change in Working Capital | ($17,140) | ||||
Labor | ($1,450,000) | Capital Expenditures | ($70,000) | |||
Materials | ($989,000) | Financial Activities | ($75,000) | |||
Cost of Goods Sold (COGS) | ($2,439,000) | Net change in cash | $37,340 | |||
Gross Margin | $1,465,600 | Ending Cash Balance | $249,840 | |||
Selling General and Admin. | ||||||
Marketing | ($400,000) | |||||
Research and Development | ($350,000) | |||||
Administration | ($250,000) | |||||
Other | ($200,000) | |||||
Depreciation | ($75,000) | |||||
S G & A | ($1,275,000) | |||||
Earnings Before Interest and Taxes (EBIT) | $190,600 | |||||
Interest Expense/Income | ($35,000) | |||||
Pre-tax Income | $155,600 | |||||
Income Tax @ 20% | ($31,120) | |||||
Net Income | $124,480 | |||||
Balance Sheets, 2011 | ||||||
Assets | Liabilities | |||||
Current Assets | Current Liabilities | |||||
Cash | $249,840 | Accounts Payable | $125,000 | |||
Accounts receivable | $60,160 | Taxes Payable | $10,000 | |||
Finished Goods Inventory | $40,000 | Total Current Liabilities | $135,000 | |||
Materials Inventory | $85,000 | Long Term Liabilities | ||||
Total Current Assets | $435,000 | Bank Loans @ 6% | $125,000 | |||
Mortgage @ 4.5% | $460,000 | |||||
Long term Assets | Total Long Term Liabilities | $585,000 | ||||
Buildings | $1,050,000 | |||||
Equipment and machines | $80,000 | Capital | Stock | $650,000 | ||
Other | $100,000 | Retained Earnings | $295,000 | |||
Total Fixed Assets | $1,230,000 | Stockholders Equity | $945,000 | |||
Total Assets | $1,665,000 | Total Liabilities and Stockholders equity | $1,665,000 | |||
Current Stock Price | $44.25 | |||||
Current Outstanding Shares | 5,000 |
CP6-4 Preparing a Multistep Income Statement with Sales Discounts and Sales Returns and Allowances and Computing the Gross Profit Percentage [LO 6-5]
[The following information applies to the questions displayed below.] |
Psymon Company, Inc. sells construction equipment. The annual fiscal period ends on December 31. The following adjusted trial balance was created from the general ledger accounts on December 31: |
Account Titles |
Debits |
Credits |
||||
Cash |
$ |
59,810 |
||||
Accounts Receivable |
24,800 |
|||||
Inventory |
90,500 |
|||||
Property and Equipment |
67,000 |
|||||
Accumulated Depreciation |
$ |
28,100 |
||||
Liabilities |
41,900 |
|||||
Common Stock |
124,000 |
|||||
Retained Earnings, January 1 |
15,000 |
|||||
Sales Revenue |
258,500 |
|||||
Sales Returns and Allowances |
8,700 |
|||||
Sales Discounts |
11,400 |
|||||
Cost of Goods Sold |
138,800 |
|||||
Salaries and Wages Expense |
23,800 |
|||||
Office Expense |
24,800 |
|||||
Interest Expenses |
3,700 |
|||||
Income Tax Expense |
14,190 |
|||||
Totals |
$ |
467,500 |
$ |
467,500 |
||
Required: |
1. |
Prepare a multistep income statement that would be used for internal reporting purposes. Treat Sales Discounts and Sales Returns and Allowances as contra-revenue accounts. TIP: Some of the accounts listed will appear on the balance sheet rather than the income statement. |
2. |
Prepare a multistep income statement that would be used for external reporting purposes, beginning with the amount for Net Sales. |