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Mattie's Mums and More is a budding flower business. Review their Income Statement to answer the questions. 1. What is Mattie's Gross Profit? 2. What is the company's Operating Income? 3. What is the Net Income for Mattie's Mums and More?

Mattie's Mums and More is a budding flower business. Review their Income Statement to answer the questions. 1. What is Mattie's Gross Profit? 2. What is the company's Operating Income? 3. What is the Net Income for Mattie's Mums and More?

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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Mattie's Mums and More is a budding flower business. Review their Income Statement to answer the questions.

1. What is Mattie's Gross Profit?

2. What is the company's Operating Income?

3. What is the Net Income for Mattie's Mums and More?

4. Which of the following changes would increase the Net Income of Mattie's business?:

5. What time period does this Income Statement cover? :

**Income Statement for Quarter Ended June 30, 2015** This financial statement provides an overview of the company's financial performance for the quarter ending June 30, 2015. | Category | Dollars ($) | |---------------------------------|--------------| | **Total Revenue** | $38,800 | | **Cost of Revenue** | $19,500 | | **Gross Profit** | ### | | **Research and Development** | $400 | | **General, Selling, and Admin** | $1,500 | | **Operating Income or Loss** | ### | | **Interest Expense** | $1,600 | | **Net Non-Recurring Events** | 20 | | **Income Taxes** | 180 | | **Net Income** | ### | ### Explanation of Key Elements: 1. **Total Revenue**: This is the total income generated by the company from its business activities during the quarter, amounting to $38,800. 2. **Cost of Revenue**: The direct costs attributable to the production of the goods sold by the company, totaling $19,500. 3. **Gross Profit**: Represented as `###`, this figure is the difference between Total Revenue and Cost of Revenue. It shows how efficiently a company is producing its goods. 4. **Research and Development**: The expenditures incurred in the development of new products and services, which total $400. 5. **General, Selling, and Administrative**: These are ongoing expenses not tied directly to a specific function or department, amounting to $1,500. 6. **Operating Income or Loss**: Represented as `###`, this figure shows the profit or loss from the company’s operations before deducting interest and taxes. 7. **Interest Expense**: The cost incurred by the company for borrowed funds, which is $1,600. 8. **Net Non-Recurring Events**: These are income or expenses that are not expected to recur in the future, totaling 20. 9. **Income Taxes**: This represents the taxes owed by the company, amounting to 180. 10. **Net Income**: Represented as `###`, this is the total profit or loss after all expenses, including interest and taxes, have been deducted from the total revenue. ### Note: The `###` placeholders indicate that the figures for Gross Profit
Transcribed Image Text:**Income Statement for Quarter Ended June 30, 2015** This financial statement provides an overview of the company's financial performance for the quarter ending June 30, 2015. | Category | Dollars ($) | |---------------------------------|--------------| | **Total Revenue** | $38,800 | | **Cost of Revenue** | $19,500 | | **Gross Profit** | ### | | **Research and Development** | $400 | | **General, Selling, and Admin** | $1,500 | | **Operating Income or Loss** | ### | | **Interest Expense** | $1,600 | | **Net Non-Recurring Events** | 20 | | **Income Taxes** | 180 | | **Net Income** | ### | ### Explanation of Key Elements: 1. **Total Revenue**: This is the total income generated by the company from its business activities during the quarter, amounting to $38,800. 2. **Cost of Revenue**: The direct costs attributable to the production of the goods sold by the company, totaling $19,500. 3. **Gross Profit**: Represented as `###`, this figure is the difference between Total Revenue and Cost of Revenue. It shows how efficiently a company is producing its goods. 4. **Research and Development**: The expenditures incurred in the development of new products and services, which total $400. 5. **General, Selling, and Administrative**: These are ongoing expenses not tied directly to a specific function or department, amounting to $1,500. 6. **Operating Income or Loss**: Represented as `###`, this figure shows the profit or loss from the company’s operations before deducting interest and taxes. 7. **Interest Expense**: The cost incurred by the company for borrowed funds, which is $1,600. 8. **Net Non-Recurring Events**: These are income or expenses that are not expected to recur in the future, totaling 20. 9. **Income Taxes**: This represents the taxes owed by the company, amounting to 180. 10. **Net Income**: Represented as `###`, this is the total profit or loss after all expenses, including interest and taxes, have been deducted from the total revenue. ### Note: The `###` placeholders indicate that the figures for Gross Profit
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