The following data were taken from the records of Township Corporation at Decemb

Question

The following data were taken from the records of Township Corporation at December 31, 2015:

Sales revenue $ 89,000

Gross profit 31,000

Selling (distribution) expense 5,600

Administrative expense ?

Pretax income 13,200

Income tax rate 35%

Shares of stock outstanding 3,900

Required: 1. Prepare a complete multiple-step income statement for the company. (Hint: Rely on the amounts and percentages given to infer missing values.) (Round "Earnings per share" to 2 decimal places.). NOTE: PLEASE ONLY INCLUDE EXACTLY WHAT SHOULD BE PLACED IN EACH OF THE YELLOW CELLS, AS THOSE ARE THE ONLY THINGS THAT NEED TO BE FILLED IN. ALSO, PLEASE FOLLOW THE FORAMT IN THE IMAGE BELOW WHEN PROVIDING THE ANSWER.

TOWNSHIP CORPORATION Income Statement For the Year Ended December 31, 2015 Operating expenses Total operating expenses arnings per share

Explanation / Answer

Sales 89000 Less : Cost of goods sold ( Note 1) 58000 Gross Profit (A) 31000 Operating Expenses      Selling expenses 5600       Administrative expenses ( Note 2) 12200 Total operating expenses (B) 17800 Operating Income ( EBIT) ( A - B) 13200 Less Tax @ 35% 4620 Net Income (D) 8580 Number of stock outstanding (E) 3900 Earning per share (D / E) 2.20 Note 1 Cost of goods sold = Sales Revenue - Gross Profit                                       = 89000 - 31000                                       = 58000 Note 2 Gross Profit - Selling Expenses - Administrative expenses = Pretax income Hence, Administrative expenses = Gross Profit - Selling expenses - Pretax Income = 31000 - 5600 - 13200                                                      = 12200

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.