FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Financial information for BDS Enterprises for the year-ended December 31, 20xx, was gathered from an accounting intern, who has asked for your guidance on how to prepare an income statement format that will be distributed to management. Subtotals and totals are included in the information, but you will need to calculate the values.
| Pretax income | ? |
| Gross profit | ? |
| Allocated costs (uncontrollable) | $2,040 |
| Labor expense | 41,580 |
| Sales | 188,000 |
| Research and development (uncontrollable) | 315 |
| 16,000 | |
| Net income/(loss) | ? |
| Cost of goods sold | 118,440 |
| Selling expense | 1,260 |
| Total expenses | ? |
| Marketing costs (uncontrollable) | 780 |
| Administrative expense | 700 |
| Income tax expense (21% of pretax income) | ? |
| Other expenses | 310 |
B. Calculate the profit margin, return on investment, and residual income. Assume an investment base of $100,000 and 6% cost of capital. Round your percentage answers to one decimal place.
| Profit margin | ? | % |
| Return on investment | ? | % |
| Residual income | ? |
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