Question

In: Accounting

The CFO for Fin Tackle Company, a manufacturer of fine fishing supplies, has provided you the...

The CFO for Fin Tackle Company, a manufacturer of fine fishing supplies, has provided you the following information from his company's accounting records. From the information presented, prepare a properly formatted, multi-step Income Statement (be sure to show intermediate profit lines - Gross Profit, EBITDA, NOI, EBIT, EBT and NI - as necessary). Per share presentation of income data is not being requested. Balance sheet account information is as of the close of business for December 31, 2017 unless otherwise indicated. Income statement information is applicable for the entire calendar year 2017 unless otherwise indicated. The company's income tax rate is 35%. The company did not purchase or dispose of any depreciable long-term assets. (Watch out - you have more information than is needed to complete this problem). Sales/Revenues $600,000 Property Tax Expense 70,000 Cash 10,000 Marketing Expenses 30,000 Warranty Liability 15,000 Prepaid Insurance 10,000 General and Administrative Expenses 35,000 Purchases of Goods for sale 75,000 Inventory available for sale as of 1/1/2017 120,000 Inventory available for sale as of 12/31/2017 95,000 Accum. Depreciation on Plant, Property, Equipment (as of 1/1/17) 120,000 Accum. Depreciation on Plant, Property, Equipment (as of 12/31/17) 160,000 Plant, Property and Equipment 500,000 Long-term debt 50,000 Dividends declared and paid to shareholders by Fin 40,000 Dividend Income 42,000 Interest Income 3,000 Interest Expense 12,000 Net Accounts Receivable 15,000 Retained Earnings 60,000 Accounts Payable 15,000 Bad Debt Expense 5,000

Solutions

Expert Solution

Solution:

Multi Step Income Statement - Fin Tackle Company
For the year ended December 31, 2017
Particulars Details Amount
Sales Revenue (A) $600,000.00
Cost of Goods Sold (B):
Opening Stock $120,000.00
Purchases of Goods for Sale $75,000.00
Ending Inventory -$95,000.00 $100,000.00
Gross Profit ( C ) (A-B) $500,000.00
Operating Expenses (D):
Property Tax Expense $70,000.00
Marketing Expense $30,000.00
General and Administratvie Expense $35,000.00
Bad debts Expense $5,000.00 $140,000.00
Earning Before Interest, Tax, Depreciation and Amortization ( E ) (C-D) $360,000.00
Depreciation ($160,000 - $120,000) $40,000.00
Net Operating Income (EBITDA - Depreciation) (F) $320,000.00
Dividend Income $42,000.00
Interest Income $3,000.00
Earning Before Interest & Taxes (EBIT) (G) $365,000.00
Interest Expense $12,000.00
Earning Before Tax (EBT) (H) $353,000.00
Income Tax Expense (35%) $123,550.00
Net Income (NI) $229,450.00

Related Solutions

The founder of X company , a manufacturer of fine fishing supplies, has provided you the...
The founder of X company , a manufacturer of fine fishing supplies, has provided you the following information from his company's accounting records. From the information presented, prepare a properly formatted, multi-step Income Statement (be sure to show intermediate profit lines - Gross Profit, EBITDA, NOI, EBIT, EBT and NI - as necessary). Per share presentation of income data is not being requested. Balance sheet account information is as of the close of business for December 31, 2017 unless otherwise...
The Berkl fishing tackle company is interested in seeing the effects of sunlight on the strength...
The Berkl fishing tackle company is interested in seeing the effects of sunlight on the strength of its premier fishing line. According to specifications the average breaking strength of a particular line is 10 pounds. a) What would be the null and alternative hypothesis for testing whether sunlight decreased the average breaking strength of the fishing line to below 10 pounds? b) Calculate the P-Value if a sample of 21 segments of fishing line that had been exposed to large...
You are employed by Spirit Company, a manufacturer of digital watches. The company’s CFO has asked...
You are employed by Spirit Company, a manufacturer of digital watches. The company’s CFO has asked that you determine the costing information for past year. You have the following information available to you to complete this process. Materials are added to production at the beginning of the manufacturing process, and overhead is applied to each product at the rate of 60% of direct labor cost. The ending WIP inventory is 50% complete as to conversion costs. There was no Finished...
A manufacturer has developed a new fishing line, which the company claims has a mean breaking...
A manufacturer has developed a new fishing line, which the company claims has a mean breaking strength of 14.5 kilograms with a standard deviation of 0.8 kilograms. Believing the mean breaking strength is less than what company has claimed, a customer protection agency took a random sample of 40 such fishing lines and found that the mean breaking strength for this sample is 13.2 kilograms. Given the breaking strength of all such lines have a normal distribution, test whether the...
A manufacturer of sports equipment has developed a new synthetic fishing line that the company claims...
A manufacturer of sports equipment has developed a new synthetic fishing line that the company claims has a mean breaking strength of 7.5 kilograms with a standard deviation of 0.7 kilogram. Test the hypothesis that µ = 7.5 kilograms, against the alternatives: (a) µ 6= 7.5; (b) µ > 7.5; (b) µ < 7.5. Given that a random sample of 50 lines is tested and found to have a mean breaking strength of 7.8 kilograms. Use a 0.01 level of...
A manufacturer of sports equipment has developed a new synthetic fishing line that the company claims...
A manufacturer of sports equipment has developed a new synthetic fishing line that the company claims has a mean breaking strength of 8 kg with a standard deviation of 0.5 kg. To test the claim, a random sample of 50 lines is tested and found to have a mean breaking strength of (7.8 kg) and a standard deviation of (0.7 kg). Could you conclude that the manufacturer claim justified at 0.01 level of significance?( state any assumptions made)    Subject: Probability...
You are the CFO of the Spade Music Company (HMC), a US-based musical instruments manufacturer. You...
You are the CFO of the Spade Music Company (HMC), a US-based musical instruments manufacturer. You have just made a huge sale to a British Music Festival company of GBP 2.5M worth of instruments. This money will be paid in GBP in 90 days and there is a FX risk attached to this transaction. Given the information below, please determine what your choices are for managing this risk, be sure to consider all possible ways. Use a 360-day year basis,...
imagine you are the manufacturer of pet supplies. You make a variety of pet supplies--cages, playhouses,...
imagine you are the manufacturer of pet supplies. You make a variety of pet supplies--cages, playhouses, leashes, beds/pet food--dry and canned/ and pet toys--chew toys, chase toys, etc. You supply your products to some of the major pet stores like PetSmart and Pet Supplies Plus. List at least four (4) Performance Categories that you might be rated on by your customers (PetSmart, Pet Supplies Plus, etc.) with regard to supply chain management. Then explain what the Performance Attribute(s) would be...
Trophy Fish Company supplies flies and fishing gear to sporting goods stores and outfitters throughout the...
Trophy Fish Company supplies flies and fishing gear to sporting goods stores and outfitters throughout the western United States. The accounts receivable clerk for Trophy Fish prepared the following partially completed aging of receivables schedule as of the end of business on December 31, 20Y4: 1 Not Days Past Due Days Past Due Days Past Due Days Past Due Days Past Due 2 Past 3 Customer Balance Due 1-30 31-60 61-90 91-120 Over 120 4 AAA Outfitters 20,900.00 20,900.00 5...
Trophy Fish Company supplies flies and fishing gear to sporting goods stores and outfitters throughout the...
Trophy Fish Company supplies flies and fishing gear to sporting goods stores and outfitters throughout the western United States. The accounts receivable clerk for Trophy Fish prepared the following partially completed aging of receivables schedule as of the end of business on December 31, 20Y6: 1 Not Days Past Due Days Past Due Days Past Due Days Past Due Days Past Due 2 Past 3 Customer Balance Due 1-30 31-60 61-90 91-120 Over 120 4 AAA Outfitters 20,000.00 20,000.00 5...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT