Superior Manufacturing Company: Income Statement
Not what you're looking for?
Complete the following exercise. Fill in the Excel spreadsheet provided via the link below to provide your answers to part a. Then paste the Excel data into a Word document on which you can also write the answer to part b.
income_statement.xlsx
Administrative Expenses........................................................................................
$ 70,000
Finished Goods Inventory January 1, 2011..............................................................
120,000
Cost of Goods Manufactured during the year.........................................................
200,000
Finished Goods Inventory December 31, 2011........................................................
60,000
Selling Expenses....................................................................................................
40,000
Sales......................................................................................................................
680,000
Required:
Using the information for Superior Manufacturing Company, prepare the income statement for the year ended December 31, 2011. (Assume a 30 % income tax.)
Create a report between 200 and 300 words in length for leadership. The topic is the state of this company. Make some suggestions if there are areas you feel need to be further investigated.
Purchase this Solution
Solution Summary
This analysis is an interpretation and identification of items logically intended to reside within the income statement. It follows the facts presented in the case to the interpretation of the data based upon trends, industry averages, and financial impacts.
Solution Preview
The first things to consider are the entries for finished goods inventory. These are actually assets, belonging on the Balance Sheet, not the Income Statement. So for purposes of this response, we will not account for these within the Income Statement (possibly placed here to determine if you are able to distinguish the difference?).
So, in order of entry, the following applies:
Sales ----------------------------------------------- $680,000
Less: Cost of Goods sold ------------------------ $200,000
Equals Gross Profit ------------------------------- $480,000
Less: Admin Expenses -------------------------- $ 70,000
Less: Selling Expenses -------------------------- $ 40,000
Equals Earnings Before Interest & Taxes ...
Purchase this Solution
Free BrainMass Quizzes
Academic Reading and Writing: Critical Thinking
Importance of Critical Thinking
Accounting: Statement of Cash flows
This quiz tests your knowledge of the components of the statements of cash flows and the methods used to determine cash flows.
Basic Social Media Concepts
The quiz will test your knowledge on basic social media concepts.
Social Media: Pinterest
This quiz introduces basic concepts of Pinterest social media
Six Sigma for Process Improvement
A high level understanding of Six Sigma and what it is all about. This just gives you a glimpse of Six Sigma which entails more in-depth knowledge of processes and techniques.