Question

The following are extracts from an income statement for the year ended 30^th June 2018:

	$
Sales revenue	12,000
Cost of sales	6,500
Administrative expenses	2,000
Interest received	50
Interest paid	200
Advertising expenses	550
Taxation (30%)	840
Dividends paid to shareholders	960

What is profit before tax?

Answer 1

Multi-step Income Statement
For the year ended 30th June 2018
Particulars	Amount ($)	Amount ($)
Sales revenue		12,000
Less: Cost of sales		(6,500)
Gross Profit		5,500
Less: Operating Expenses
Administrative expenses	(2,000)
Advertising expenses	(550)
Total operating expeses		(2,550)
Operating Income		2,950
Other revenues / (Expenses)
Interest received	50
Interest paid	(200)	(150)
Profit Before Tax		2,800

HEnce, the Profit Before Tax will be $2,800