Requirements 1. Fill in the missing information for PennsylvaniaPennsylvania's year endedJuly31,2018, income statement. Round to the nearest dollar. 2. Compute the times-interest-earned ratio for the company. Round to two decimals.
Requirements 1. Fill in the missing information for PennsylvaniaPennsylvania's year endedJuly31,2018, income statement. Round to the nearest dollar. 2. Compute the times-interest-earned ratio for the company. Round to two decimals.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
The income statement for
Pennsylvania Communications follows. Assume
Pennsylvania Communications signed a 3-month, 12%,
$40,000 note on June 1, 2018, and that this was the only note payable for the company.
Requirements
|
1.
|
Fill in the missing information for
PennsylvaniaPennsylvania's
year endedJuly31,2018,income statement. Round to the nearest dollar. |
|
2.
|
Compute the times-interest-earned ratio for the company. Round to two decimals.
|
![### Pennsylvania Communications Income Statement
#### Year Ended July 31, 2018
**Net Sales Revenue:**
- $34,000
**Cost of Goods Sold:**
- $8,000
**Gross Profit:**
- $26,000
**Operating Expenses:**
- **Selling Expenses:**
- $740
- **Administrative Expenses:**
- $1,700
- **Total Operating Expenses:**
- $2,440
**Operating Income:**
- $23,560
**Other Income and (Expenses):**
- **Interest Expense:**
- [Amount not provided]
- **Total Other Income and (Expenses):**
- [Amount not provided]
**Net Income before Income Tax Expense:**
- [Amount not provided]
**Income Tax Expense:**
- $4,550
**Net Income:**
- [Amount not provided]](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ffb664485-ce74-4058-a58b-60138da85334%2F3e8e6446-3204-4676-899a-ac72fbac1adf%2Fxlz1oak.png&w=3840&q=75)
Transcribed Image Text:### Pennsylvania Communications Income Statement
#### Year Ended July 31, 2018
**Net Sales Revenue:**
- $34,000
**Cost of Goods Sold:**
- $8,000
**Gross Profit:**
- $26,000
**Operating Expenses:**
- **Selling Expenses:**
- $740
- **Administrative Expenses:**
- $1,700
- **Total Operating Expenses:**
- $2,440
**Operating Income:**
- $23,560
**Other Income and (Expenses):**
- **Interest Expense:**
- [Amount not provided]
- **Total Other Income and (Expenses):**
- [Amount not provided]
**Net Income before Income Tax Expense:**
- [Amount not provided]
**Income Tax Expense:**
- $4,550
**Net Income:**
- [Amount not provided]
![**Requirement 1**: Fill in the missing information for Pennsylvania's year ended July 31, 2018, income statement. Round to the nearest dollar. *(Use a 12-month year for interest computations. Use a minus sign or parentheses to enter other expenses.)*
---
**Pennsylvania Communications**
**Income Statement**
**Year Ended July 31, 2018**
| Item | Amount |
|-----------------------------------|-------------|
| **Net Sales Revenue** | $34,000 |
| **Cost of Goods Sold** | ($8,000) |
| **Gross Profit** | $26,000 |
| **Operating Expenses:** | |
| - Selling Expenses | $740 |
| - Administrative Expenses | $1,700 |
| **Total Operating Expenses** | ($2,440) |
| **Operating Income** | $23,560 |
| **Other Income and (Expenses):** | |
| - Interest Expense | [Blank] |
| **Total Other Income and (Expenses)** | [Blank] |
| **Net Income before Income Tax Expense** | [Blank] |
| **Income Tax Expense** | ($4,550) |
| **Net Income** | [Blank] |
---
**Explanation**: The income statement outlines Pennsylvania Communications' financial performance for the year ended July 31, 2018. The key elements in this financial document include:
1. **Net Sales Revenue**: The total revenue generated from sales activities, which amounts to $34,000.
2. **Cost of Goods Sold (COGS)**: The direct costs attributable to the production of goods sold by the company, which is $8,000.
3. **Gross Profit**: The profit a company makes after deducting the costs associated with making and selling its products, calculated as $34,000 - $8,000 = $26,000.
4. **Operating Expenses**: This breaks down into:
- Selling Expenses: The costs directly related to the sale of products, totaling $740.
- Administrative Expenses: The expenses related to the general administration of the business, totaling $1,700.
5. **Total Operating Expenses**: The sum of selling and administrative expenses, equaling $2,440.
6. **Operating Income**: Gross profit minus total operating expenses, resulting in $23](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ffb664485-ce74-4058-a58b-60138da85334%2F3e8e6446-3204-4676-899a-ac72fbac1adf%2Fi0rwxkf.png&w=3840&q=75)
Transcribed Image Text:**Requirement 1**: Fill in the missing information for Pennsylvania's year ended July 31, 2018, income statement. Round to the nearest dollar. *(Use a 12-month year for interest computations. Use a minus sign or parentheses to enter other expenses.)*
---
**Pennsylvania Communications**
**Income Statement**
**Year Ended July 31, 2018**
| Item | Amount |
|-----------------------------------|-------------|
| **Net Sales Revenue** | $34,000 |
| **Cost of Goods Sold** | ($8,000) |
| **Gross Profit** | $26,000 |
| **Operating Expenses:** | |
| - Selling Expenses | $740 |
| - Administrative Expenses | $1,700 |
| **Total Operating Expenses** | ($2,440) |
| **Operating Income** | $23,560 |
| **Other Income and (Expenses):** | |
| - Interest Expense | [Blank] |
| **Total Other Income and (Expenses)** | [Blank] |
| **Net Income before Income Tax Expense** | [Blank] |
| **Income Tax Expense** | ($4,550) |
| **Net Income** | [Blank] |
---
**Explanation**: The income statement outlines Pennsylvania Communications' financial performance for the year ended July 31, 2018. The key elements in this financial document include:
1. **Net Sales Revenue**: The total revenue generated from sales activities, which amounts to $34,000.
2. **Cost of Goods Sold (COGS)**: The direct costs attributable to the production of goods sold by the company, which is $8,000.
3. **Gross Profit**: The profit a company makes after deducting the costs associated with making and selling its products, calculated as $34,000 - $8,000 = $26,000.
4. **Operating Expenses**: This breaks down into:
- Selling Expenses: The costs directly related to the sale of products, totaling $740.
- Administrative Expenses: The expenses related to the general administration of the business, totaling $1,700.
5. **Total Operating Expenses**: The sum of selling and administrative expenses, equaling $2,440.
6. **Operating Income**: Gross profit minus total operating expenses, resulting in $23
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