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Accounting Task

E4-4 (Income Statement Presentation)
The financial records of Dunbar Inc. were destroyed by fire at the end of 2010.
Fortunately, the controller had kept certain statistical data related to the income
statement as presented below.
1. The beginning merchandise inventory was $92.000 and decreased 20% during
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the current year
Sales discount amount to $17.000
30.000 ordinary shares were outstanding for the entire year.
Interest expense was $20.000
The income tax rate is 30%
Cost of goods sold amounts to $500.000
Administrative expenses are 18% of cost of goods sold but only 8% of gross sales
Four fifths of the operating expenses relate to sales activities.

Instructions
From the foregoing information, prepare an income statement for the year 2010.

Answered :

000 Gross Profit $ 608.400 $ .000 $ 90.000 Interest Expenses $ 20.000 Less : Sales discount $ 17.DUNBAR INC INCOME STATEMENT FOR THE YEAR ENDED DEEMBER 31.108.125.000 Income from operations $ 158.000 Income before income tax $ 138.000 Cost of Goods Sold $ 500.000 Selling Expenses Administrative Expenses $360.000 Income Tax Net Income for the year 96. 2010 Sales Revenue : Sales $1.000 Net sales revenue $1.000 $ 450.600 $ 41.

000 : 8% = $1.000 = $90.000 = $41.400 e.000 c.000 b.22 a. Administrative expenses = 18% x Cost of goods sold = 18% x $500.000 d.22 E4-5 (Income Statement) Presented below is information related to Webster Company ($000 omitted).000 = $3.900 $ . Selling expenses = 4 x Administrative expenses = 4 x $90.Earnings per share 3.125. Sales = Administrative expenses : 8% = $90.000 = $360.600 : 30. Earnings per share = Net income for the year : 30. Tax = 30% x Income berfore income tax = 30% x $138.000 share = $96. Administrative expenses Officer’s salaries $ 4.

500 Income tax 7.580 Interest expense 1. Ordinary shares outstanding for 2010 total 40.480 Sales 96.500 Cost of Goods Sold $ 63.690 .550 ($000 omitted).980 Depreciation of sales equipment 6. Answered : WEBSTER COMPANY INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31.230 Selling expenses Transportation out 2.860 Instructions Prepare an income statement for the year 2010.Depreciation of office furniture and equipment 3.570 Gross Profit $ 32.570 Rental revenue 17.930 Selling Expenses Transportation out $ 2.960 Cost of good sold 63. 2010 Sales Revenue : Sales $ 96.690 Sales commissions 7.

150 Interest Expenses Income before income tax $ 1.150 Officer’s salaries $ 4.980 Depreciation of sales equipment 6.900 Depreciation of office furniture and equipment 3.010 Other income and expense Rental revenue $ 17.860 $ 22.480 $ 17.860 Administrative Expenses $ 26.960 $ 8.290 Income Tax Net Income for the year $ 7.230 Income from operations $ 24.580 $ 14.36 $ .Sales commisions 7.710 Earnings per share 0.