You are the assistant accountant at Golden Ltd, and you have prepared the following income statement for the year ended 30 June:
Golden Ltd
Income statement for the year ended 30 June
Sales .............................................................. $247 000
Cost of sales ..................................................... 124 000
Other income .................................................... 13 000
Advertising expenses .......................................... 16 000
Administrative expenses ....................................... 32 000
Finance expenses .................................................. 4 000
Other expenses...................................................... 26 000
Profit .................................................................... $58 000
Additional information:
• The other income comprises $1800 of interest income.
• Administrative expenses include $6700 for the depreciation of office equipment.
• Finance expenses include $3700 interest expense on a bank loan.
• Other expenses include the write-off of the amount owed by a major customer ($23 000) who has gone bankrupt.
The accountant has requested you to produce the following financial information:
(a) Gross profit
(b) Profit before interest = Profit plus net interest
(c) Profit before material items
(d) Earnings before interest, tax and depreciation