Compute the missing values of the income statement under different cases.

Answer to Problem 11E
Preparation of income statement of Company BGT and computation of missing amounts as given below:
Company BGT | |||||
Statement of Income | |||||
For the year ended | |||||
Particulars | Case A | Case B | Case C | Case D | Case E |
Sales revenue | $770 | (4) $1,200 | (7) $400 | $600 | $1,050 |
Less: Cost of Goods sold | (3) $300 | $320 | $125 | $250 | (12) $420 |
Gross margin | (2) $470 | $880 | (6) $275 | (9) $350 | $630 |
Less: Administrative expense | $200 | $120 | $80 | (10) $150 | $175 |
Less: Selling expense | $90 | $275 | $45 | $70 | (13)$85 |
Pretax income | (1) $180 | (5) $485 | $150 | $130 | $370 |
Less: Income tax expense | $65 | $210 | $60 | $45 | (14) $130 |
Net income | $115 | $275 | (8) $90 | (11) $85 | $240 |
Table (1)
Explanation of Solution
Financial statement: Financial statements are condensed summary of transactions communicated in the form of reports for the purpose of decision making. The financial statements show the financial status of the business. The financial statements consist of the
Income statement: Income statement is a financial statement that shows the net income or net loss by deducting the expenses from the revenues and vice versa.
Working Note:
Determine the amount of pretax income.
Determine the amount of gross margin.
Determine the amount of cost of goods sold.
Determine the amount of sales revenue.
Determine the amount of pretax income.
Determine the amount of gross margin.
Determine the amount of sales revenue.
Determine the amount of net income.
Determine the amount of gross margin.
Determine the amount of administrative expense.
Determine the amount of net income.
Determine the amount of cost of goods sold.
Determine the amount of selling expense.
Determine the amount of income tax expense.
Want to see more full solutions like this?
Chapter 5 Solutions
INTRO TO FIN ACCT (LL W/ ACCESS-1 SMSTR
- After several profitable years running her business, Ingrid decided to acquire the assets of a small competing business. On May 1 of year 1, Ingrid acquired the competing business for $354,000. Ingrid allocated $59,000 of the purchase price to goodwill. Ingrid's business reports its taxable income on a calendar-year basis. Note: Do not round intermediate calculations. Round your answers to the nearest whole dollar amount. a. How much amortization expense on the goodwill can Ingrid deduct in year 1, year 2, and year 3? Year 1 Deductible Amortization Expense Year 2 Year 3arrow_forwardChapter 19 Homework 15 0.87 points eBook Saved Exercise 19-20 (Algo) Contribution margin ratio by sales territory LO A1 Help Save & Exit Submit Check my work Big Bikes manufactures and sells mountain bikes in two sales territories, West Coast and East Coast. Information for the year follows. The company sold 550 bikes in each territory. Per unit Sales price Variable cost of goods sold West Coast $ 1,500 East Coast $ 1,440 830 70 830 Variable selling and administrative expenses 160 Ask a. Compute contribution margin (in dollars) for each sales territory. b. Compute contribution margin ratio for each sales territory. Which sales territory has the better contribution margin ratio? Print Complete this question by entering your answers in the tabs below. References Required A Required B Compute contribution margin (in dollars) for each sales territory. Sales Variable expenses Variable cost of goods sold Variable selling and administrative expenses Contribution margin West Coast East Coast…arrow_forwardChapter 19 Homework 15 0.87 points eBook Saved Exercise 19-20 (Algo) Contribution margin ratio by sales territory LO A1 Help Save & Exit Submit Check my work Big Bikes manufactures and sells mountain bikes in two sales territories, West Coast and East Coast. Information for the year follows. The company sold 550 bikes in each territory. Per unit Sales price Variable cost of goods sold West Coast $ 1,500 East Coast $ 1,440 830 70 830 Variable selling and administrative expenses 160 Ask a. Compute contribution margin (in dollars) for each sales territory. b. Compute contribution margin ratio for each sales territory. Which sales territory has the better contribution margin ratio? Print Complete this question by entering your answers in the tabs below. References Required A Required B Compute contribution margin (in dollars) for each sales territory. Sales Variable expenses Variable cost of goods sold Variable selling and administrative expenses Contribution margin West Coast East Coast…arrow_forward
- A machine costing $77,500 with a 5-year life and $4,700 residual value was purchased January 2. Compute depreciation for each of the 5 years, using the double-declining-balance method. Year1 Y2 Y3 Y4 Y5arrow_forwardSolare Company acquired mineral rights for $536,800,000. The diamond deposit is estimated at 48,800,000 tons. During the current year, 3,390,000 tons were mined and sold. Required: 1.Determine the depletion rate. 2. Determine the amount of depletion expense for the current year. 3.Journalize the adjusting entry to recognize the depletion expense. Refer to the Chart of Accounts for exact wording of account titles. _____________ Debit / Credit _____________ Debit / Crditarrow_forwardExercise 1-24 (Algo) Linking the statement of owner's equity and balance sheet LO P2 Mahomes Company reported the following data at the end of its first year of operations on December 31. Cash Accounts receivable Equipment Land Accounts payable Owner investments Mahomes, Withdrawals Net income $ 15,500 16,500 18,500 62,500 12,500 62,500 31,500 69,500 (a) Prepare its year-end statement of owner's equity. Hint. Mahomes, Capital on January 1 was $0. (b) Prepare its year-end balance sheet, using owner's capital calculated in part a. Complete this question by entering your answers in the tabs below. Required A Required B Prepare its year-end statement of owner's equity. Hint: Mahomes, Capital on January 1 was $0. Cash MAHOMES COMPANY Statement of Owner's Equity For Year Ended December 31arrow_forward
- AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
- Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSONIntermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill EducationFinancial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education





