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 41,580 Sales 190,000 Research and development (uncontrollable) 310 Depreciation expense 18,000 Net income/(loss) ? Cost of goods sold 119,700 Selling expense 1,260 Total expenses ? Marketing costs (uncontrollable) 800 Administrative expense 690 Income tax expense (21% of pretax income) ? Other expenses 330 Question Content Area A. Prepare the income statement using the above information. Round your answers to the nearest dollar. BDS EnterprisesIncome StatementFor the Year Ended Dec. 31, 20xx $Sales Cost of Goods Sold $Gross Profit $Labor Expense Depreciation Expense Selling Expense Administrative Expense Other Expenses Allocated Costs (Uncontrollable) Research and Development (Uncontrollable) Marketing Costs (Uncontrollable) Total Expenses $fill in the blank cc78b4018fd9fa7_23 $Pretax Income Income Tax Expense (21% of Pretax Income) $Net Income 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 b19586fb8faa038_1 % Return on investment fill in the blank b19586fb8faa038_2 % Residual income $fill in the blank b19586fb8faa038_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.
The Effect Of Prepaid Taxes On Assets And Liabilities
Many businesses estimate tax liability and make payments throughout the year (often quarterly). When a company overestimates its tax liability, this results in the business paying a prepaid tax. Prepaid taxes will be reversed within one year but can result in prepaid assets and liabilities.
Final Accounts
Financial accounting is one of the branches of accounting in which the transactions arising in the business over a particular period are recorded.
Ledger Posting
A ledger is an account that provides information on all the transactions that have taken place during a particular period. It is also known as General Ledger. For example, your bank account statement is a general ledger that gives information about the amount paid/debited or received/ credited from your bank account over some time.
Trial Balance and Final Accounts
In accounting we start with recording transaction with journal entries then we make separate ledger account for each type of transaction. It is very necessary to check and verify that the transaction transferred to ledgers from the journal are accurately recorded or not. Trial balance helps in this. Trial balance helps to check the accuracy of posting the ledger accounts. It helps the accountant to assist in preparing final accounts. It also helps the accountant to check whether all the debits and credits of items are recorded and posted accurately. Like in a balance sheet debit and credit side should be equal, similarly in trial balance debit balance and credit balance should tally.
Adjustment Entries
At the end of every accounting period Adjustment Entries are made in order to adjust the accounts precisely replicate the expenses and revenue of the current period. It is also known as end of period adjustment. It can also be referred as financial reporting that corrects the errors made previously in the accounting period. The basic characteristics of every adjustment entry is that it affects at least one real account and one nominal account.
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) | $2,030 |
| Labor expense | 41,580 |
| Sales | 190,000 |
| Research and development (uncontrollable) | 310 |
| 18,000 | |
| Net income/(loss) | ? |
| Cost of goods sold | 119,700 |
| Selling expense | 1,260 |
| Total expenses | ? |
| Marketing costs (uncontrollable) | 800 |
| Administrative expense | 690 |
| Income tax expense (21% of pretax income) | ? |
| Other expenses | 330 |
Question Content Area
A. Prepare the income statement using the above information. Round your answers to the nearest dollar.
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$Sales |
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Cost of Goods Sold |
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$Gross Profit |
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$Labor Expense |
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Depreciation Expense |
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Selling Expense |
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Administrative Expense |
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Other Expenses |
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Allocated Costs (Uncontrollable) |
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Research and Development (Uncontrollable) |
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Marketing Costs (Uncontrollable) |
| Total Expenses | $fill in the blank cc78b4018fd9fa7_23 |
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$Pretax Income |
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Income Tax Expense (21% of Pretax Income) |
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$Net Income |
B. Calculate the profit margin,
| Profit margin | fill in the blank b19586fb8faa038_1 | % |
| Return on investment | fill in the blank b19586fb8faa038_2 | % |
| Residual income | $fill in the blank b19586fb8faa038_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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