Q12: What is Music, Inc.’s 2021 Pre-Tax Income? Part 2: Music, Inc.Music, Inc. had the following beginning and ending values in its three inventory accounts:Jan 1, 2021$500$1,200$600Dec. 31, 2021$800Raw Materials InventoryWork-in-Progress InventoryFinished Goods Inventory$1,300$750Additional information for the year ending December 31, 2021:Manufacturing costs: $2,875Sales revenue: $15,900Selling & Admin expenses: $3,600Interest expense: $160Income tax rate: 20%

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What is Music, Inc.’s 2021 Pre-Tax Income?

Financial Accounting: The Impact on Decision Makers

10th Edition

ISBN:9781305654174

Author:Gary A. Porter, Curtis L. Norton

Publisher:Gary A. Porter, Curtis L. Norton

Chapter5: Inventories And Cost Of Goods Sold

Section: Chapter Questions

Problem 5.12MCP

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Concept explainers

Fringe Benefit Tax

Fringe benefits are in addition to the compensation that companies give to their employees. It is an additional benefit above the stated salary. It helps to keep the employees of the firm motivated as sometimes the only salary is not enough to retain the quality employees of the firm. There are different types of fringe benefits. Fringe benefits are given in both private as well as public enterprises.

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Q12: What is Music, Inc.’s 2021 Pre-Tax Income?

Part 2: Music, Inc.
Music, Inc. had the following beginning and ending values in its three inventory accounts:
Jan 1, 2021
$500
$1,200
$600
Dec. 31, 2021
$800
Raw Materials Inventory
Work-in-Progress Inventory
Finished Goods Inventory
$1,300
$750
Additional information for the year ending December 31, 2021:
Manufacturing costs: $2,875
Sales revenue: $15,900
Selling & Admin expenses: $3,600
Interest expense: $160
Income tax rate: 20%

Expert Solution

Step 1

Income statement is prepared with a view to ascertain the total earnings of an entity over a specific time period.

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