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blondinia [14]
3 years ago
7

The following income statements were drawn from the annual report of The Western Sales Company. Year 2 Year 1 Sales 40,000 40,00

0 Cost of Goods Sold (25,000 ) (25,000 ) Gross Margin 15,000 15,000 Operating Expenses (7,000 ) (9,000 ) Operating Income 8,000 6,000 Gain on the sale of land 0 5,000 Net Income 8,000 11,000 If the trends continue, investors can expect the company's net income for Year 3 to____________
Business
1 answer:
aniked [119]3 years ago
3 0

Answer:

$9,555

Explanation:

As for the trend provided, the year 3 Sales will also be $40,000

Cost of goods sold will be $25,000

gross margin = $15,000

Operating expenses are decreasing with time by \frac{9,000 - 7,000}{9,000} = 0.22

Thus, it will decrease with the same trend = $7,000 - 22.22% = $5,445

Rounded off

Therefore, net income = $15,000 - $5,445 = $9,555

Note: Gain on sale of land is one time event and not permanent, thus it will not be considered as part of trend.

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Answer:

B) duress.

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An early warning signal for the potential of an overdrawn budget is created when: contingency funds are applied for. a bottom-up
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Small percentage changes in an amount from a company's financial statement may still represent large dollar amounts; therefore,
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marin [14]

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