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# The Plane ride to Profit

See the attached file.

Chapter 6: Written Assignment: The Plane Ride to Profit

You are the President of Union Molding, on an airplane to meet with a potential investor. You have just opened your briefcase expecting to find the latest income statement, but in its place is the sales and expense data. Because your office is on the East Coast and you are going to the West Coast, it will be too late to call your office when you arrive. You need to create an income statement from the following data before the plane lands. Values or account names need to be inserted into the shaded boxes below.

Units sold 10,000 Selling Expenses \$167,000
Beginning Inventory \$200,000 Ending Inventory \$250,000
Unit Price \$ 62.50 Office Supplies \$ 5,000
Utility Expense \$ 7,000 Insurance Expense \$ 10,000
Income Taxes \$ 28,000 Employee Health Insurance \$ 6,000
Purchases \$300,000 Interest Expense \$ 40,000
Shares Outstanding 5,000

Union Molding
Income Statement

Sales \$
? Beginning Inventory \$200,000
? Purchases \$ \$500,000
? \$
\$250,000
Gross Margin\$

Selling Expenses \$

? \$
? \$
? Insurance Expense \$
? \$ \$ 28,000
\$195,000
Operating Profit \$
\$
Profit Before Tax \$
\$
\$112,000

Gross Margin Ratio %
Cost of Goods Sold Ratio %
Operating Profit Margin %
Earnings Per Share \$

#### Solution Preview

Check the attached sheet.

Chapter 6: Written Assignment: The Plane Ride to Profit (27 points)

You are the President of Union Molding, on an airplane to meet with a potential investor. You have just opened your briefcase expecting to find the latest income statement, but in its place is the sales and expense data. Because your office is on the East Coast and you are going to the West Coast, it will be too ...

#### Solution Summary

The solution computes the Income statement for Union molding and calculates ratios.

\$2.19