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 Depreciation expense 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 ?

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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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
Depreciation expense 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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