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Income Statement: Income statement is one of the three financial statements that every organization prepares periodically. It helps the users of the financial statements in analyzing the profitability of the organization. To prepare : Income statement and balance sheet for 2019. Income statement has been prepared below: Income Statement For year ending 2019 Particulars $ Sales 9,082 Less: Cost of goods sold (3,305) Gross Profit 5,777 Less: Depreciation (1,216) Less: Other expenses (577) Earnings before interest and taxes (EBIT) 3,984 Less: Interest (652) Earnings before taxes 3,332 Tax rate 21% Less: Taxes 700 Net income 2,632 Less: Dividends 1,135 Addition to retained earnings 1,497 Wherein, Income statement and balance sheet for year 2018 has been prepared below: Income Statement For year ending 2018 Particulars $ Sales 8,462 Less: Cost of goods sold (2,912) Gross Profit 5,550 Less: Depreciation (1,215) Less: Other expenses (690) Earnings before interest and taxes (EBIT) 3,645 Less: Interest (567) Earnings before taxes 3,078 Tax rate 21% Less: Taxes 646 Net income 2,432 Less: Dividends (1,032) Retained earnings 1,400 Balance sheet has been prepared below: Balance Sheet For year 2018 Assets $ Liabilities & Shareholders’ equity $ Current assets: Shareholders’ equity [(i) - (a + b + c) 35,412 Cash 4,438 Retained earnings (a) 1,400 Accounts receivable 4,874 Current liabilities: Inventory 10,444 Short-term notes payable 858 Total current assets (a) 19,756 Accounts payable 4661 Net fixed assets (b) 37,112 Total current liabilities (b) 5,519 Long-term debt (c) 14,537 Total assets (i) 56,868 Total debt & shareholders’ equity (i) 56,868 Note: Total assets are equal to the sum of total debt and shareholders’ equity.

Income Statement: Income statement is one of the three financial statements that every organization prepares periodically. It helps the users of the financial statements in analyzing the profitability of the organization. To prepare : Income statement and balance sheet for 2019. Income statement has been prepared below: Income Statement For year ending 2019 Particulars $ Sales 9,082 Less: Cost of goods sold (3,305) Gross Profit 5,777 Less: Depreciation (1,216) Less: Other expenses (577) Earnings before interest and taxes (EBIT) 3,984 Less: Interest (652) Earnings before taxes 3,332 Tax rate 21% Less: Taxes 700 Net income 2,632 Less: Dividends 1,135 Addition to retained earnings 1,497 Wherein, Income statement and balance sheet for year 2018 has been prepared below: Income Statement For year ending 2018 Particulars $ Sales 8,462 Less: Cost of goods sold (2,912) Gross Profit 5,550 Less: Depreciation (1,215) Less: Other expenses (690) Earnings before interest and taxes (EBIT) 3,645 Less: Interest (567) Earnings before taxes 3,078 Tax rate 21% Less: Taxes 646 Net income 2,432 Less: Dividends (1,032) Retained earnings 1,400 Balance sheet has been prepared below: Balance Sheet For year 2018 Assets $ Liabilities & Shareholders’ equity $ Current assets: Shareholders’ equity [(i) - (a + b + c) 35,412 Cash 4,438 Retained earnings (a) 1,400 Accounts receivable 4,874 Current liabilities: Inventory 10,444 Short-term notes payable 858 Total current assets (a) 19,756 Accounts payable 4661 Net fixed assets (b) 37,112 Total current liabilities (b) 5,519 Long-term debt (c) 14,537 Total assets (i) 56,868 Total debt & shareholders’ equity (i) 56,868 Note: Total assets are equal to the sum of total debt and shareholders’ equity.

Solution Summary: The author explains that income statement is one of the three financial statements that every organization prepares periodically.

Corporate Finance

Corporate Finance

12th Edition

ISBN: 9781259918940

Author: Ross, Stephen A.

Publisher: Mcgraw-hill Education,

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Chapter 2, Problem 20QAP

Chapter 2, Problem 22QAP

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Chapter 2 Solutions

Corporate Finance

Ch. 2 - Prob. 1CQ Ch. 2 - Prob. 2CQ Ch. 2 - Prob. 3CQ Ch. 2 - Prob. 4CQ Ch. 2 - Prob. 5CQ Ch. 2 - Cash Flow from Assets Why is it not necessarily...Ch. 2 - Operating Cash flow Why is it not necessarily bad...Ch. 2 - Net Working Capital and Capital Spending Could a...Ch. 2 - Cash Flow to Stockholders and Creditors Could a...Ch. 2 - Prob. 10CQ

Ch. 2 - Building a Balance Sheet Alesha, Inc., has current...Ch. 2 - Building an Income Statement Gia, Inc, has sales...Ch. 2 - Market Values and Book Values Klingon Cruisers,...Ch. 2 - Calculating Taxes Terri Simmons is single and had...Ch. 2 - Calculating OCF Sheaves, Inc., has sales of...Ch. 2 - Prob. 6QAP Ch. 2 - Prob. 7QAP Ch. 2 - Prob. 8QAP Ch. 2 - Prob. 9QAP Ch. 2 - Prob. 10QAP Ch. 2 - Cash Flows Ritter Corporations accountants...Ch. 2 - Financial Cash Flows The Stancil Corporation...Ch. 2 - Building an Income Statement During the year, the...Ch. 2 - Prob. 14QAP Ch. 2 - Prob. 15QAP Ch. 2 - Residual Claims Stark: Inc., is obligated to pay...Ch. 2 - Net Income and OCF During 2019, Rainbow Umbrella...Ch. 2 - Prob. 18QAP Ch. 2 - Prob. 19QAP Ch. 2 - Prob. 20QAP Ch. 2 - Prob. 21QAP Ch. 2 - Prob. 22QAP Ch. 2 - Cash Flows You are researching Time Manufacturing...Ch. 2 - Prob. 24QAP Ch. 2 - Prob. 1MC Ch. 2 - Prob. 2MC Ch. 2 - Prob. 3MC

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