Ford Motor Company, one of the world’s largest automakers, reports the following income statement accounts for the year ended De
cember 31, 2015 ($ in millions). Selling and administrative costs $ 14,999 Cost of sales 124,041 Revenues 149,558 Other expenses 3,145 Using the above information prepare Ford’s income statement for the year ended December 31, 2015. (Enter your answers in millions.)
1 answer:
Answer:
Explanation:
In the income statement, the total revenues and the total expenses are recorded.
If the total revenues are more than the total expenditure then the company earns net income
And, If the total revenues are less than the total expenditure then the company have a net loss
This net income or net loss would reflect in the statement of the retained earning account.
Before preparing the income statement, we need to calculate the net income or net loss for the given period.
So,
The net income = Revenue - the cost of sales - Selling and administrative costs - other expenses
= $149,558 - $124,041 - $14,999 - $3,145
= $7,373
The preparation of the income statement is presented in the spreadsheet. Kindly find the attachment below:
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Answer: $41,520
Explanation;
Equivalent units of production are used when some goods have not been fully processed but costs need to be attached to them. The incomplete ones will be converted to complete goods depending on how far along the production process they are.
Equivalent units for conversion costs = Transfers out during October + Ending WIP * Percentage completion
= 37,800 + (5,700 * 60%)
= $41,520
