Question

Answers go in the yellow boxes

Use the following information to complete the income statement for company A for the year ending December 31, 201X
Revenue	$      120,000,000
Gross margin	50.0%
Selling General and Administrative (SG&A)	20.0%	of revenue
Research and Development (R&D)	15.00%	of revenue
Depreciation expense (D&A)	$           5,000,000
Interest Expense	$           5,000,000
Interest Income	$           2,000,000
Tax Rate	35%
Securities Information
Weighted Average Shares (12/31/1X)	$            10,000,000
A Warrants exercisable @ $2.00	$              2,200,000
B Warrants Exercisable @ $3.00	$              2,500,000
Stock Price (12/31/1X)	$                       4.00
COMPLETE THE FOLLOWING INCOME STATEMENT
Answers go in the yellow boxes		Points
Revenue	$      120,000,000
Cost of Goods Sold		1
Gross Profit		1
Operating Expenses
SG&A		1
R&D		1
D&A
Operating Expenses Total		1
Operating Income		5
Income Expense, net		1
Pre Tax Income		1
Tax		1
Net Income		2
EPS Basic		5
EPS Diluted		10
	Total points	30

Answer 1

Cost of Goods Sold=50% of Revenue= 50%*120000000=$60,000,000

Gross Profit= 50% of revenue= 50%*120000000=$60,000,000

SG&A=20% of Revenue=20%*120000000=$24,000,000

R&D=15% of revenue=15%*120000000=$18,000,000

Total Operating Expense=(SG&A+R&D+D&A)=24,000,000+18,000,000+5,000,000=$47,000,000

Operating Income=60000000-47000000=$13,000,000

Income Expense,net=Interest Income-Interest Expense=2000000-5000000=$-3,000,000

Pretax Income=13000000-3000000=$10,000,000

Tax=35%*$10,000,000=3,500,000

Net Income= (10000000-3500000)=$6,500,000

number of ordinary share outstanding=10000000/4=2,500,000

Total Diluted share=2500000+2200000/2+2500000/3=833333.33

Basic EPS=6,500,000/2500000=$2.60

Diluted EPS=6,500,000/833333.33=$1.47

Use the following information to complete the income statement for company A for the year ending December 31, 201X
Revenue	$      120,000,000
Gross margin	50.00%
Selling General and Administrative (SG&A)	20.00%	of revenue
Research and Development (R&D)	15.00%	of revenue
Depreciation expense (D&A)	$5,000,000
Interest Expense	$5,000,000
Interest Income	$2,000,000
Tax Rate	35%
Securities Information
Weighted Average Shares (12/31/1X)	$10,000,000
A Warrants exercisable @ $2.00	$2,200,000
B Warrants Exercisable @ $3.00	$2,500,000
Stock Price (12/31/1X)	$4.00
COMPLETE THE FOLLOWING INCOME STATEMENT
Answers go in the yellow boxes		Points
Revenue	$120,000,000
Cost of Goods Sold	$     60,000,000.00	1
Gross Profit	$60,000,000	1
Operating Expenses
SG&A	$24,000,000	1
R&D	$18,000,000	1
D&A	$5,000,000
Operating Expenses Total	$47,000,000	1
Operating Income	$13,000,000	5
Income Expense, net	($3,000,000)	1
Pre Tax Income	$10,000,000	1
Tax	$3,500,000	1
Net Income	$6,500,000	2
EPS Basic	$2.60	5
EPS Diluted	$1.47	10