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CALIFORNIA COMMUNICATIONS Income Statement Year Ended July 31, 2018 Net Sales Revenue $ 21,800 Cost of Goods Sold 14,000 Gross Profit 7,800 Operating Expenses: Selling Expenses 720 Administrative Expenses 1,650 Total Operating Expenses 2,370 Operating Income 5,430 Other Income and (Expenses): Interest Expense Total Other Income and (Expenses) Net Income before Income Tax Expense Income Tax Expense 1,080 Net Income

CALIFORNIA COMMUNICATIONS Income Statement Year Ended July 31, 2018 Net Sales Revenue $ 21,800 Cost of Goods Sold 14,000 Gross Profit 7,800 Operating Expenses: Selling Expenses 720 Administrative Expenses 1,650 Total Operating Expenses 2,370 Operating Income 5,430 Other Income and (Expenses): Interest Expense Total Other Income and (Expenses) Net Income before Income Tax Expense Income Tax Expense 1,080 Net Income

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Computing times-interest-earned ratio

The income statement for California Communications follows. Assume California Communications signed a 3-month, 9%, $3,000 note on June 1, 2018, and that this was the only note payable for the company.

Requirements

  1. Fill in the missing information for California’s year ended July 31, 2018, income statement. Round to the nearest dollar.
  2. Compute the times-interest-earned ratio for the company. Round to two decimals.
CALIFORNIA COMMUNICATIONS Income Statement Year Ended July 31, 2018 Net Sales Revenue $ 21,800 Cost of Goods Sold 14,000 Gross Profit 7,800 Operating Expenses: Selling Expenses 720 Administrative Expenses 1,650 Total Operating Expenses 2,370 Operating Income 5,430 Other Income and (Expenses): Interest Expense Total Other Income and (Expenses) Net Income before Income Tax Expense Income Tax Expense 1,080 Net Income
Transcribed Image Text:CALIFORNIA COMMUNICATIONS Income Statement Year Ended July 31, 2018 Net Sales Revenue $ 21,800 Cost of Goods Sold 14,000 Gross Profit 7,800 Operating Expenses: Selling Expenses 720 Administrative Expenses 1,650 Total Operating Expenses 2,370 Operating Income 5,430 Other Income and (Expenses): Interest Expense Total Other Income and (Expenses) Net Income before Income Tax Expense Income Tax Expense 1,080 Net Income
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