Gross profit margin is 40%, tax rate is 30%: Sales year 1: 45000, year 2: 54000, year 3: 64800 (is year 3 correct at being a 20% increase?) I need to calculate the following: Cost of goods sold for year 3 given that: selling, general, and admin expenses are: 7150; depreciation is 2500; interest expense is 1250 all for year three; accounts receivable year 1: 15000, year 2: 12,500; net plant, property and equipment is year 1: 12500 and need to calculate year 2. I need help calculating the cost of good sold, the tax expense, cash collected from sales (which I think is 52300), and net plant, property and equipment for year 3.
Gross profit margin is 40%, tax rate is 30%:
Sales year 1: 45000, year 2: 54000, year 3: 64800 (is year 3 correct at being a 20% increase?)
I need to calculate the following:
Cost of goods sold for year 3 given that:
selling, general, and admin expenses are: 7150;
I need help calculating the cost of good sold, the tax expense, cash collected from sales (which I think is 52300), and net plant, property and equipment for year 3.
I am also
Net income is referred to the income earned by an organization or an individual proprietor after deducting all the expenses incurred from the total revenue generated. It indicates the profitability of a company. It is reported in the income statement of the company.
Sales for year 3= $54,000 × 120%= $64,800
Notes:
- It is assumed that the accounts receivable of 1st year were received in 2nd year and will not be carried forward to 3rd
- It is assumed that depreciation expense is consistent for all the years.
Cost of goods sold= sales – gross profit
= $64,800 – (40% of $64,800)
= $64,800 - $25,920
= $38,880
Operating income= Gross profit – selling general and admin, expenses – depreciation – interest expense
= $25,920 - $7,150 - $2,500 - $1,250
= $15,020
Tax expense= 30% of $15,020
= $4,506
Cash collected from sales= Total sales – Accounts receivable
= $64,800 - $12,500= $52,300
Net property, plant and equipment at the end of 2nd year= $12,500 – depreciation expenses
= $12,500 - $2,500
= $10,000
Net property, plant and equipment at the end of 3rd year= $10,000 – depreciation expenses
= $10,000 - $2,500
= $7,500
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