Fill in the missing values for the income statement below given the following in

Question

Fill in the missing values for the income statement below given the following information:
Gross margin is 42%
Direct labor costs are half the amount of Direct materials costs
Times-interest-earned ratio is 25.0
Tax rate is 20%

Fill in the missing values for the income statement below given the following information:
Gross margin is 42%
Direct labor costs are half the amount of Direct materials costs
Times-interest-earned ratio is 25.0
Tax rate is 20%

Mashayekhi and Meckstroth Merchandising, Inc. Income Statement as of the year ending September 30, 2017 (in thousands) Sales revenue Less: Cost of goods sold $ 65,990 Direct materials Direct labor Manufacturing overhead 20,240 Total cost of goods sold Gross profit Less: Operating expenses Selling expenses 3,220 General and administrative expenses Total operating expenses Earnings before interest and taxes Interest expense Income before income taxes Income tax expense NET INCOME (LOSS) 850

Explanation / Answer

Prepare income statement :

Sales 65990 Less: Cost of goods sold Direct material 20240 Direct labour 10120 Manufacturing overhead 7914.20 Total cost of goods sold 38274.20 gross profit 27715.80 Less: Operating expense Selling expense 3220 General and administrative expense 3245.80 Total operating expense 6465.80 Earning before interest and taxes 21250 Interest expense 850 Income before income taxes 20400 Income tax expense 4080 net income (loss) 16320

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