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You are a summer intern at the office of a local tax preparer. To test your basic knowledge of financial statements, your manager, who graduated
You are a summer intern at the office of a local tax preparer. To test your basic knowledge of financial statements, your manager, who graduated from your alma mater 2 years ago, gives you the following list of accounts and asks you to prepare a simple income statement using those accounts. a. Arrange the accounts into a well-labeled income statement. Make sure you label and solve for gross profits, operating profits, and net profits before taxes. b. Using a 35% tax rate, calculate taxes paid and net profils after taxes. c. Assuming a dividend of $1.09 per share with 4.28 million shares outstanding, calculate EPS and additions to retained earnings. a. Complete the income statement, down to the nel profils before taxes line, below: (Select the account names from the drop-down menus and round the amounts to two decimal places.) Name of Company Income Statement ($000,000) i Data Table 1. 2. (Click on the icon located on the top-right comer of the data table below in order to copy its contents into a spreadsheet.) Gross profits Less: Operating expenses 3. $ 4. Accounts Depreciation expense General and administrative expenses Sales Salos expenses Cost of goods sold Lease expense Interest expense ($000,000) 24.37 22.02 345.43 18.57 5. 6. 224.54 $ 3.87 3.86 Total operating expense Operating profits (EBIT) 7. Print Done Net profits before taxes $ b. Complete the income statement, from the net profits before taxes line to the net profits after taxes line, below: (Round to two decimal places.) Name of Company Income Statement ($000,000) Cont'd Net profits before taxes Less: Taxes (35%) Net profits after taxes c. The firm's EPS is $ (Round to the nearest cent.) The firm's additions to retained earnings are $ million. (Round to two decimal places.) Choose from any list or enter any number in the input fields and then continue to the next
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