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TOPIC: INTERIM FINANCIAL REPORTING Compute for the net income/(loss) for the second and third quarter of 2021.

TOPIC: INTERIM FINANCIAL REPORTING Compute for the net income/(loss) for the second and third quarter of 2021.

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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TOPIC: INTERIM FINANCIAL REPORTING

Compute for the net income/(loss) for the second and third quarter of 2021.

Sales 2,400,000 1,780,000) 620,000 90,000 280,000 990,000 P Cost of sales Gross profit Interest income Gain on sale of machinery Total income Selling and distribution expenses General and administrative expenses Casualty loss P 230,000 150,000 75,000 455,000) 535,000 75.000) 460,000 138,000) Net income before interest and tax Finance costs Net income before tax Income tax expense Net income after tax P. 322,000 The following information were taken from the records of COOKIES during the year: a. Sales during the year were made as follows: 1* quarter, 30%; 2d quarter, 20%; 3rd quarter, 25%; 4th quarter, 25%. For interim purposes, a gross profit of 40% can be justified. b. Variable operating expenses are allocated on the same proportion as sales, while fixed operating expenses are allocated based on the passage of time. Of the total operating expenses, P220,000 are variable. c. A machine with a carrying value of P585,000 was sold on April 1 for P865,000, resulting in a gain of P280,000. d. On September 1, a flood destroyed certain inventory items located in one of COOKIES warehouses. e. Interest income pertains to an investment in bonds of another company that was purchased on January 1. It was earned evenly during the year. f. Finance costs pertains to interest incurred on its long-term notes payable. It was incurred evenly during the year. g. Income tax rate of 30% was applied on all interim periods.
Transcribed Image Text:Sales 2,400,000 1,780,000) 620,000 90,000 280,000 990,000 P Cost of sales Gross profit Interest income Gain on sale of machinery Total income Selling and distribution expenses General and administrative expenses Casualty loss P 230,000 150,000 75,000 455,000) 535,000 75.000) 460,000 138,000) Net income before interest and tax Finance costs Net income before tax Income tax expense Net income after tax P. 322,000 The following information were taken from the records of COOKIES during the year: a. Sales during the year were made as follows: 1* quarter, 30%; 2d quarter, 20%; 3rd quarter, 25%; 4th quarter, 25%. For interim purposes, a gross profit of 40% can be justified. b. Variable operating expenses are allocated on the same proportion as sales, while fixed operating expenses are allocated based on the passage of time. Of the total operating expenses, P220,000 are variable. c. A machine with a carrying value of P585,000 was sold on April 1 for P865,000, resulting in a gain of P280,000. d. On September 1, a flood destroyed certain inventory items located in one of COOKIES warehouses. e. Interest income pertains to an investment in bonds of another company that was purchased on January 1. It was earned evenly during the year. f. Finance costs pertains to interest incurred on its long-term notes payable. It was incurred evenly during the year. g. Income tax rate of 30% was applied on all interim periods.
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