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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) | $2,030 |
Labor expense | 41,590 |
Sales | 189,000 |
Research and development (uncontrollable) | 320 |
18,000 | |
Net income/(loss) | ? |
Cost of goods sold | 119,070 |
Selling expense | 1,250 |
Total expenses | ? |
Marketing costs (uncontrollable) | 780 |
Administrative expense | 700 |
Income tax expense (21% of pretax income) | ? |
Other expenses | 310 |
A. Prepare the income statement to include all costs, but separate out uncontrollable costs using the above information. Round your answers to the nearest dollar.
BDS Enterprises | |
Income Statement | |
For the Year Ended December 31, 20xx | |
$fill in the blank d5aab6fb1fdef99_2 | |
fill in the blank d5aab6fb1fdef99_4 | |
$fill in the blank d5aab6fb1fdef99_6 | |
Controllable Expenses: | |
$fill in the blank d5aab6fb1fdef99_8 | |
fill in the blank d5aab6fb1fdef99_10 | |
fill in the blank d5aab6fb1fdef99_12 | |
fill in the blank d5aab6fb1fdef99_14 | |
fill in the blank d5aab6fb1fdef99_16 | |
Total Controllable Expenses | $fill in the blank d5aab6fb1fdef99_17 |
Uncontrollable Expenses: | |
$fill in the blank d5aab6fb1fdef99_19 | |
fill in the blank d5aab6fb1fdef99_21 | |
fill in the blank d5aab6fb1fdef99_23 | |
Total Uncontrollable Expenses | $fill in the blank d5aab6fb1fdef99_24 |
Total Expenses | $fill in the blank d5aab6fb1fdef99_25 |
$fill in the blank d5aab6fb1fdef99_27 | |
fill in the blank d5aab6fb1fdef99_29 | |
$fill in the blank d5aab6fb1fdef99_31 |
B. Calculate the profit margin, return on investment, and residual income, excluding uncontrollable expenses. Assume an investment base of $100,000 and 4% cost of capital. Round your percentage answers to one decimal place and residual income to the nearest dollar.
Profit margin | fill in the blank 784c37077068fd9_1 | % |
Return on investment | fill in the blank 784c37077068fd9_2 | % |
Residual income | $fill in the blank 784c37077068fd9_3 |
C. Which of the following statements is correct? Uncontrollable costs are included in the income statement because
a. these costs ultimately affect each division. |
b. these costs are the responsibility of each division manager. |
c. these costs are non-recurring. |
d. these costs are head office's responsibility. |
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- Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.arrow_forwardFinancial 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) $2,035 Labor expense 41,580 Sales 188,000 Research and development (uncontrollable) 310 Depreciation expense17,000 Net income/(loss) ? Cost of goods sold 118,440 Selling expense 1,240 Total expenses ? Marketing costs (uncontrollable) 800 Administrative expense 690 Income tax expense (21% of pretax income) ? Other expenses 310arrow_forwardi am confused for this question please provide correct answerarrow_forward
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