Manufacturer’s income statement: alternative expense classification Narcissus makes mirrors. N asks for your help in preparing an income statement for the third quarter of x2, using the information below. The company is short-staffed and N is preoccupied with quality inspection.

Quarter 3, x2 In B000 Start End Raw materials 13 9 Work-in-progress 22 15 Finished mirrors 21 34.

During quarter 3, x2 Production Sales and admin.
department departments Materials purchased 50 –
Supplies purchased and used – 2 Salaries and employee benefits 46 28 Depreciation 23 11 Utilities and other overheads 8 4 The company sells 25,000 mirrors at a unit price of A8. The corporate income tax rate is 30%.
Required

(a) Calculate Narcissus Company’s gross profit for quarter 3, x2.

(b) Draw up an income statement for Narcissus Company for the third quarter of x2. Assume the company classifies expenses:
(i) by function; and (ii) by nature.
Check figure:
Cost of goods sold A125,000.

AppenedixLO1