03 May QuestionBalance Sheet #3We reviewed the balance sheet for VWV in t
Question
Balance Sheet #3
We reviewed the balance sheet for VWV in the prior module. This time we are examining the income statement for the same entity.
| VWV Company | ||
| Income Statement | ||
| For the Period Ending December 31, 20XX | ||
| Revenues | $540,000 | |
| Cost of goods sold | 200,000 | |
| Gross profit | $340,000 | |
| Operating expenses | ||
| Salaries | $100,000 | |
| Lease for office | 30,000 | |
| Advertising and promotion | 24,000 | |
| Utilities | 9,700 | |
| Property taxes | 18,000 | |
| Payroll taxes | 11,500 | |
| Insurance | 8,000 | |
| Depreciation | 19,922 | |
| Miscellaneous expenses | 9,000 | |
| Total operating expenses | $230,122 | |
| Operating income | $109,878 | |
| Interest income | $250 | |
| Interest expense | 12,000 | |
| Net interest expense | $11,750 | |
| Net income | $98,128 |
Use the above income statement to answer the questions below.
1. Is VWV a manufacturer/reseller or a service company?
2. Explain the term cost of goods sold in your own words. Why is this item significant?
3. Does the company have employees?
4. Does the company own some type of property? Can we tell from looking at the income statement alone or do we need to look at the balance sheet too?
5. Are earnings per share important information for VWV Company?
6. How do the dividends affect the income statement?
7. How do we know that VWV Company is using the accrual basis of accounting? Hint: Do not forget to look at the balance sheet from the prior module.
8. Why is the company using the accrual basis of accounting rather the cash basis?
9. Comment on operating income versus net income.
SLP Assignment Expectations
Use Word and respond in a question and answer format. There is no need to use Excel for this particular SLP.
Our website has a team of professional writers who can help you write any of your homework. They will write your papers from scratch. We also have a team of editors just to make sure all papers are of HIGH QUALITY & PLAGIARISM FREE. To make an Order you only need to click Ask A Question and we will direct you to our Order Page at WriteDemy. Then fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.
Fill in all the assignment paper details that are required in the order form with the standard information being the page count, deadline, academic level and type of paper. It is advisable to have this information at hand so that you can quickly fill in the necessary information needed in the form for the essay writer to be immediately assigned to your writing project. Make payment for the custom essay order to enable us to assign a suitable writer to your order. Payments are made through Paypal on a secured billing page. Finally, sit back and relax.
About Writedemy
We are a professional paper writing website. If you have searched a question and bumped into our website just know you are in the right place to get help in your coursework. We offer HIGH QUALITY & PLAGIARISM FREE Papers.
How It Works
To make an Order you only need to click on “Order Now” and we will direct you to our Order Page. Fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.
Are there Discounts?
All new clients are eligible for 20% off in their first Order. Our payment method is safe and secure.