Question

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 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

Answer 1

	OPERATING INCOME
	Sales			600000
	Sub Total
	OPERATING EXPNSES
	Cost of goods sold
	Inventory 1/1/17		120000
	Purchases		75000
	Sub total		195000
	Inventory 31/12/17		95000	100000
	Gross Profit			500000
	Admn and selling expenses
	Marketing expense		30000
	Poperty Tax		70000
	General and admn. Expenses		35000
	Bad debt expense		5000	140000
	Sub Total			140000
	OPERATING INCOME			360000
	NON OPERATING INCOME
	Dividend		42000
	Interest Income		3000
	Sub total			45000
	EBIDTA			405000
	Interest expens			12000
	Depreciation			40000
	Sub total			52000
	Net Operating Income			353000
	Dividend expense			40000
	Earnng before Tax			313000
	Tax provision			109550
	Earning aftr Tax			203450
BALANCE SHEET
	Current Assets
	Cash		10000
	Inventory		95000
	Account Receivable		15000
	Prepaid Insurance		10000	130000
	Fixed Assets, net of depreciation			340000
	TOTAL ASSETS			470000
	Current Liabilities
	Warranty liability		15000
	Provision for tax		109550
	Accounts payable		15000	139550
	Stakeholders capital
	Equity			67000	Remaning figure
	Retained earnings:
	Opening balance		60000
	Income for the year		203450	263450
	TOTAL LIABILITES			470000