Cliff is preparing a loan application to be used for expansion. Using the data b
ID: 2624063 • Letter: C
Question
Cliff is preparing a loan application to be used for expansion. Using the data below (only), prepare an Income Statement. Within this Income statement, include totals for Cost of Goods Sold, Gross Margin, Sales General, and Administrative, Earnings before Interest and Taxes, Pretax Income, and Net Income. Also compute the Profit Margin on Sales =Net Income / Revenue. Submit using a spreadsheet
Price each
$9.95
Quantity Sold
150,000
Production Labor Costs each unit
$18.25
Material Costs each unit
$12.00
Labor Overhead
5%
of labor
Marketing
$55,000
Depreciation
$18,000
Research and Development
$18,000
Administrative
$72,000
Interest Expense
$4,600
Taxes
5.0%
of pretax Income
Price each
$9.95
Quantity Sold
150,000
Production Labor Costs each unit
$18.25
Material Costs each unit
$12.00
Labor Overhead
5%
of labor
Marketing
$55,000
Depreciation
$18,000
Research and Development
$18,000
Administrative
$72,000
Interest Expense
$4,600
Taxes
5.0%
of pretax Income
Explanation / Answer
Sales Sales 1,492,500 Other Total Sales 1,492,500 Less Cost of Goods Sold Materials 1,800,000 Labor 2,737,500 Overhead 136,875 Other Total Cost of Goods Sold 4,674,375 Gross Profit (3,181,875) Sales and General Admin Costs Marketing/promotion 55,000 Administrative 72,000 Depreciation 18,000 Research and development 18,000 Other Total Sales and General Admin Costs 163,000 Operating Income (3,344,875) Interest income (expense) 4,600 Other income (expense) Total Nonoperating Income (Expense) 4,600 Income (Loss) Before Taxes (3,340,275) Income Taxes 0 Net Income (Loss) (3,340,275) Cumulative Net Income (Loss) (3,340,275)
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