29 Jun Cost of goods sold
Question
Q19. Using the data below prepare a common size income statement?
($ 000)
($ 000)
Sales revenue
30,000
Cost of goods sold
21,000
Gross profit
9,000
operating expenses
Selling expenses
3,000
General and admin. expenses
1,800
Lease expenses
200
Depreciation expenses
1,000
Total operating expenses
6,000
Operating profit
3,000
Interest
1,000
EBT
2,000
Tax (40% of EBT)
800
Net profit
1,200
Q20. Use the data given below to calculate the values for the following:
sales
$40,000,000
Gross Profit Margin
80%
Operating Profit Margin
35%
Net Profit Margin
8%
Return on total assets
16%
Return on common equity
20%
Total asset turnover
2
Average collection period
62.2 days
Required:
a) Gross profit
b) Cost of goods sold
c) Operating profit
d) Operating expenses
e) Earnings available for common shareholders
f) Total assets
g) Total common stock equity
h) Accounts receivable
It is a 365 days year, assume all sales are on credit basis.
Q21. Euro Designs, Inc., expects sales during 2010 to rise from the 2009 level of $3.5 million to $3.9 million. Because of a scheduled large loan payment, the interest expense in 2010 is expected to drop to $325,000. The firm plans to increase its cash dividend payments during 2010 to $320,000. The company’s year-end 2009 income statement is below.
($ 000)
Sales
3,500
Cost of goods sold
1,925
Gross profit
1,575
operating expenses
420
Operating profit
1,155
Interest
400
EBT
755
Tax (40% of EBT)
302
Net profit
453
Cash Dividend
250
Addition to retained earnings
203
Use the percent-of-sales method to prepare a 2007 pro forma income statement for Euro Designs, Ltd.
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