Accounting Chap 6

Homework due Friday November 11 ACCOUNTING INCOME STATEMENT, BALANCE woodworking plane CASH time period PROBLEMS 1. A distributor purchases outgrowth from a manufacturer and resells the crossway to retailers for 20% more(prenominal) than it gainful for the product. During this accounting period, the distributor had a beginning product line balance of $10,000,000. It received oral communication of $45,000,000 worth of product and its ending inventory balance was $5,000,000. The deliveries to customers it sell for 20% more than it paid. operational Expenses for the accounting period were $1,000,000 without depreciation. wear and tear on its offices and warehouse amounted to $1,000,000 for the accounting period. Interest on its revolving banknote of ascribe amounted to $3,000,000 for the accounting period. The distributor is tasked at a 40% tax rate.

For Financial Reporting to shareholders, Net Income for this distributor is: $3,000,000 COGS of sell products: $10,000,000 - $5,000,000 + $45,000,000 = $50,000,000 follow revenues: $50,000,000 x 1,2 = $60,000,000 |Revenues |$60,000,000 | |COGS |($50,000,000) | |Gross Profit |$10,000,000 | |Operating Expenses |($1,000,000) | |Operating Income |$9,000,000 | |disparagement |($1,000,000) ! | |EBIT |$8,000,000 | |Interest Expenses |($3,000,000) | |EBT |$5,000,000 | |Tax Expenses |($2,000,000) | |Net Income |$3,000,000 | 2. A accompany exhausted $40,000,000 from...

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