Problem 4.24 Calculate income from operations and net income Selected informatio
ID: 2903024 • Letter: P
Question
Problem 4.24
Calculate income from operations and net income Selected information LO 6, 7 taken from the financial statements of Fordstar Co. for the year ended December 31, 2013, follows:
Net cash provided by operations
$ 49,000
Cost of goods sold
155,000
Selling, general, and administrative expenses
62,000
Accounts payable
45,000
Dividends paid
68,000
Research and development expenses
15,000
Merchandise inventory
Provision for income taxes
39,000
Net sales
420,000
Interest expense
32,000
a. Calculate income from operations (operating income) for the year ended December 31, 2013. (Hint: You may wish to review Exhibit 2-2.)
b. Calculate net income for the year ended December 31, 2013.
PLEASE SOLVE THE TABLE BELOW
P4.24.
a.
Net sales
Cost of goods sold
Gross profit
Selling, general and administrative expenses
Research and development expenses
Income from operations (operating income)
b.
Income from operations (operating income)
Interest expense
Income before taxes
Provision for income taxes
Net income
Net cash provided by operations
$ 49,000
Cost of goods sold
155,000
Selling, general, and administrative expenses
62,000
Accounts payable
45,000
Dividends paid
68,000
Research and development expenses
15,000
Merchandise inventory
Provision for income taxes
39,000
Net sales
420,000
Interest expense
32,000
Explanation / Answer
Net sales 420000 (-) Cost of goods sold 155000 Gross profit 265000 (-) Selling, general and administrative expenses 62000 (-) Research and development expenses 15000 Income from operations (operating income) 188000 Income from operations (operating income) 188000 (-) Interest expense 32000 Income before taxes 156000 (-) Provision for income taxes 39000 Net income 117000