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tamaranim1 [39]
3 years ago
13

The following is the general ledger for ABC Company as of December 31, 20X1. Use this information to answer questions (1) throug

h (4).
ABC Company

General Ledger

As of December 31, 20X1

Amount

Assets

Cash

$29,400

Accounts receivable

8,100

Supplies

4,900

Prepaid rent

20,200

Equipment (net)

63,800

Liabilities

Accounts payable

$ 6,300

Salaries payable

4,000

Interest payable

1,100

Utilities payable

3,700

Bonds payable

38,400

Stockholders' equity

Common stock

$60,900

Retained earnings

0

Dividends

2,100

Revenues

Sales revenue

$54,200

Interest revenue

1,400

Expenses

Cost of goods sold

$15,100

Salaries expense

7,100

Rent expense

4,900

Supplies expense

1,300

Utilities expense

4,800

Depreciation expense

2,500

Interest expense

2,100

Income tax expense

3,700

What is the amount of gross profit to be reported on ABC Company’s 12/31/X1 income statement?

$40,500

$14,100

$39,100

$17,800

What is the amount of operating income (EBIT) to be reported on ABC Company’s 12/31/X1 income statement?

$36,100

$18,500

$14,800

$14,100

What is the amount of earnings before taxes (EBT) to be reported on ABC Company’s 12/31/X1 income statement?

$15,000

$17,800

$12,000

$18,500

What is the amount of net income to be reported on ABC Company’s 12/31/X1 income statement?

$17,800

$12,000

$14,100

$18,500
Business
1 answer:
sweet [91]3 years ago
5 0

Answer:

What is the amount of gross profit to be reported on ABC Company’s 12/31/X1 income statement?

Gross Profit = Sales Revenue - Cost of Goods Sold

                    = $54,200 - 15,100

                    = $39,100

What is the amount of operating income (EBIT) to be reported on ABC Company’s 12/31/X1 income statement?

EBIT = Sales Revenue - Cost of Goods Sold - Operating Expenses

We have the following operating expenses:

Salaries expense $7,100

Rent expense = $4,900

Supplies expense = $1,300

Utilities expense = $4,800

Depreciation expense = $2,500

Total operating expenses = $20,600

Now we substract this figure from the gross profit we found above

EBIT = $39,100 - 20,600

        = $18,500

What is the amount of earnings before taxes (EBT) to be reported on ABC Company’s 12/31/X1 income statement?

EBT = Sales Revenues + Interest Revenue - Cost of Goods Sold - Operating Expenses - Non-Operating Expenses.

EBT = $54,200 + $1,400 - $15,100 - $20,600 - $2,100

      = $17,800

What is the amount of net income to be reported on ABC Company’s 12/31/X1 income statement?

Net Income = Sales Revenues + Interest Revenue - Cost of Goods Sold - Operating Expenses - Non-Operating Expenses - Tax Expense

We simply substract the Tax Expense ($3,700), from the EBT.

Net Income = $17,800 - $3,700

                   = $14,100

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