One of the audit clients Airtel has presented the income
statement below to the audit firm Earnest and Young where you work
as an assistant auditor.
Airtel Income Statement for the year ended December 31,
2018
ZMK
Revenue
1,392,000
Cost of goods
sold
680,480
Gross
profit
711,520
Distribution Administration
expenses
367,200
Profit from
Operation
344,320
Other income
Gain on sale of
equipment
56,000
Income before
taxes
400,320
Income
taxes
118,400
Net
income
281,920
The audit partner has decided that 5%...