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) $2,035 Labor expense 41,590 Sales 189,000 Research and development (uncontrollable) 315 Depreciation expense 16,000 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 330 A. Prepare the income statement using the above information. Round your answers to the nearest dollar. BDS Enterprises Income Statement For the Year Ended Dec. 31, 20xx Sales $fill in the blank c8599b09205f02e_2 Cost of Goods Sold fill in the blank c8599b09205f02e_4 Gross Profit $fill in the blank c8599b09205f02e_6 Labor Expense $fill in the blank c8599b09205f02e_8 Depreciation Expense fill in the blank c8599b09205f02e_10 Selling Expense fill in the blank c8599b09205f02e_12 Administrative Expense fill in the blank c8599b09205f02e_14 Other Expenses fill in the blank c8599b09205f02e_16 Allocated Costs (Uncontrollable) fill in the blank c8599b09205f02e_18 Research and Development (Uncontrollable) fill in the blank c8599b09205f02e_20 Marketing Costs (Uncontrollable) fill in the blank c8599b09205f02e_22 Total Expenses $fill in the blank c8599b09205f02e_23 Pretax Income $fill in the blank c8599b09205f02e_25 Income Tax Expense (21% of Pretax Income) fill in the blank c8599b09205f02e_27 Net Income $fill in the blank c8599b09205f02e_29 Feedback A. Review the structure of the income statement. Revenues are shown first, then expenses. 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 fill in the blank bb14fc036fc7072_1 % Return on investment fill in the blank bb14fc036fc7072_2 % Residual income $fill in the blank bb14fc036fc7072_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.

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) $2,035 Labor expense 41,590 Sales 189,000 Research and development (uncontrollable) 315 Depreciation expense 16,000 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 330 A. Prepare the income statement using the above information. Round your answers to the nearest dollar. BDS Enterprises Income Statement For the Year Ended Dec. 31, 20xx Sales $fill in the blank c8599b09205f02e_2 Cost of Goods Sold fill in the blank c8599b09205f02e_4 Gross Profit $fill in the blank c8599b09205f02e_6 Labor Expense $fill in the blank c8599b09205f02e_8 Depreciation Expense fill in the blank c8599b09205f02e_10 Selling Expense fill in the blank c8599b09205f02e_12 Administrative Expense fill in the blank c8599b09205f02e_14 Other Expenses fill in the blank c8599b09205f02e_16 Allocated Costs (Uncontrollable) fill in the blank c8599b09205f02e_18 Research and Development (Uncontrollable) fill in the blank c8599b09205f02e_20 Marketing Costs (Uncontrollable) fill in the blank c8599b09205f02e_22 Total Expenses $fill in the blank c8599b09205f02e_23 Pretax Income $fill in the blank c8599b09205f02e_25 Income Tax Expense (21% of Pretax Income) fill in the blank c8599b09205f02e_27 Net Income $fill in the blank c8599b09205f02e_29 Feedback A. Review the structure of the income statement. Revenues are shown first, then expenses. 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 fill in the blank bb14fc036fc7072_1 % Return on investment fill in the blank bb14fc036fc7072_2 % Residual income $fill in the blank bb14fc036fc7072_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.

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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Question

Pretax income	?
Gross profit	?
Allocated costs (uncontrollable)	$2,035
Labor expense	41,590
Sales	189,000
Research and development (uncontrollable)	315
Depreciation expense	16,000
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	330

A. Prepare the income statement using the above information. Round your answers to the nearest dollar.

BDS Enterprises
Income Statement
For the Year Ended Dec. 31, 20xx
Sales	$fill in the blank c8599b09205f02e_2
Cost of Goods Sold	fill in the blank c8599b09205f02e_4
Gross Profit	$fill in the blank c8599b09205f02e_6
Labor Expense	$fill in the blank c8599b09205f02e_8
Depreciation Expense	fill in the blank c8599b09205f02e_10
Selling Expense	fill in the blank c8599b09205f02e_12
Administrative Expense	fill in the blank c8599b09205f02e_14
Other Expenses	fill in the blank c8599b09205f02e_16
Allocated Costs (Uncontrollable)	fill in the blank c8599b09205f02e_18
Research and Development (Uncontrollable)	fill in the blank c8599b09205f02e_20
Marketing Costs (Uncontrollable)	fill in the blank c8599b09205f02e_22
Total Expenses	$fill in the blank c8599b09205f02e_23
Pretax Income	$fill in the blank c8599b09205f02e_25
Income Tax Expense (21% of Pretax Income)	fill in the blank c8599b09205f02e_27
Net Income	$fill in the blank c8599b09205f02e_29

Feedback

A. Review the structure of the income statement. Revenues are shown first, then expenses.

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	fill in the blank bb14fc036fc7072_1	%
Return on investment	fill in the blank bb14fc036fc7072_2	%
Residual income	$fill in the blank bb14fc036fc7072_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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