Cost of Goods Sold Selling Expenses Administrative Expenses Interest Expenses Other Expenses Income before Taxes Income Tax Expenses Net Income (a) $2,561 $458 (b) $554 $2,046 (c) . (d) Use the following ratio data to complete FS Company's income statement. Inventory turnover is 4 (beginning inventory was $895; ending inventory was $758). • Inventory turnover = cost of goods sold / Average inventory Rate of Return on Sales is 0.15
Cost of Goods Sold Selling Expenses Administrative Expenses Interest Expenses Other Expenses Income before Taxes Income Tax Expenses Net Income (a) $2,561 $458 (b) $554 $2,046 (c) . (d) Use the following ratio data to complete FS Company's income statement. Inventory turnover is 4 (beginning inventory was $895; ending inventory was $758). • Inventory turnover = cost of goods sold / Average inventory Rate of Return on Sales is 0.15
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:c) Income tax expenses =
- ( ) 276
- ( ) 305
- ( ) 471
- ( ) 533
This question appears to be part of a multiple-choice test, asking students to select the correct value for income tax expenses from the given options.
![**MY Company**
*Income Statement*
*December 31, 2018*
(Amounts in thousands)
| Description | Amount |
|------------------------------|----------|
| Net Sales | $10,500 |
| Cost of Goods Sold | (a) |
| Selling Expenses | $2,561 |
| Administrative Expenses | $458 |
| Interest Expenses | (b) |
| Other Expenses | $554 |
| Income before Taxes | $2,046 |
| Income Tax Expenses | (c) |
| Net Income | (d) |
**Instructions:**
Use the following ratio data to complete FS Company's income statement:
- **Inventory turnover** is 4 (beginning inventory was $895; ending inventory was $758).
- Inventory turnover = cost of goods sold / average inventory
- **Rate of Return on Sales** is 0.15
**Steps to Complete:**
1. Calculate the average inventory using the formula:
\[
\text{Average Inventory} = \frac{\text{Beginning Inventory} + \text{Ending Inventory}}{2}
\]
2. Use the inventory turnover to determine the Cost of Goods Sold (COGS) with the formula:
\[
\text{Inventory Turnover} = \frac{\text{COGS}}{\text{Average Inventory}}
\]
3. Apply the Rate of Return on Sales to find the Net Income:
\[
\text{Net Income} = \text{Net Sales} \times \text{Rate of Return on Sales}
\]
4. Determine remaining expenses (Interest and Income Tax) by back-calculation from Income before Taxes and Net Income.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F75575e6b-0232-49e0-b34d-4bc55fc248a8%2F0cd7069b-2c40-4428-9e80-66cb512b539d%2Ffif9kmn_processed.jpeg&w=3840&q=75)
Transcribed Image Text:**MY Company**
*Income Statement*
*December 31, 2018*
(Amounts in thousands)
| Description | Amount |
|------------------------------|----------|
| Net Sales | $10,500 |
| Cost of Goods Sold | (a) |
| Selling Expenses | $2,561 |
| Administrative Expenses | $458 |
| Interest Expenses | (b) |
| Other Expenses | $554 |
| Income before Taxes | $2,046 |
| Income Tax Expenses | (c) |
| Net Income | (d) |
**Instructions:**
Use the following ratio data to complete FS Company's income statement:
- **Inventory turnover** is 4 (beginning inventory was $895; ending inventory was $758).
- Inventory turnover = cost of goods sold / average inventory
- **Rate of Return on Sales** is 0.15
**Steps to Complete:**
1. Calculate the average inventory using the formula:
\[
\text{Average Inventory} = \frac{\text{Beginning Inventory} + \text{Ending Inventory}}{2}
\]
2. Use the inventory turnover to determine the Cost of Goods Sold (COGS) with the formula:
\[
\text{Inventory Turnover} = \frac{\text{COGS}}{\text{Average Inventory}}
\]
3. Apply the Rate of Return on Sales to find the Net Income:
\[
\text{Net Income} = \text{Net Sales} \times \text{Rate of Return on Sales}
\]
4. Determine remaining expenses (Interest and Income Tax) by back-calculation from Income before Taxes and Net Income.
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