PROBLEM:The CFO of Melbourne Ltd presented the following income Statement for the yearending June 30, 19A, to the board of Directors:Rs.Rs.18,000,000SalesCost of Goods SoldDirect Material5,700,0004,350,0003,675,000Direct LaborFOH13,725,0004,275,000Gross ProfitOperating ExpensesAdmin ExpensesSelling ExpensesOperating IncomeIncome Tax @ 30%2,025,0001,500,0003,525,000225,000525,000Net ProfitThe board discusses the ratio of Net Profit to sales and decided that for the yearending June 30, 19B, an increase of at least 30% is required in Net profit. While thesales volume is expected to increase by 25%, all costs and expenses point toconsiderable increase in costs; e.g. direct material , 7%; direct labour, 10%; Factoryoverhead 5% ; Operating expenses 8%. The increase in FOH will apply to only variableportion which is 1,500,000. As for as Operating expenses are concerned, volume isexpected to cause increase in only Selling Expense. Income tax rate for year 19B isexpected to be 25%. Prepare forecasted Income Statement for the year ends on June30, 19B incorporating all above stated items.

Definition: Income Statement: It is one of the financial statements which shows incomes and…

Answered: Net Profit

Business

Accounting

Net Profit

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

Chapter9: Working Capital

Section: Chapter Questions

Problem 22E

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Financial information for BDS Enterprises for the year-ended December 31, 20xx, was gathered from an accounting intern, who has asked for your guidance on how to prepare an income statement format that will be distributed to management. Subtotals and totals are included in the information, but you will need to calculate the values. A. In the correct format, prepare the income statement using the following information: B. Calculate the profit margin, return on investment, and residual income. Assume an investment base of $100,000 and 6% cost of capital. C. Prepare a short response to accompany the income statement that explains why uncontrollable costs are included in the income statement.
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Financial information for BDS Enterprises for the year-ended December 31, 20xx, was gathered from an accounting intern, who has asked for your guidance on how to prepare an income statement format that will be distributed to management. Subtotals and totals are included in the information, but you will need to calculate the values. Pretax income ? Gross profit ? Allocated costs (uncontrollable) $2,035 Labor expense 41,590 Sales 189,000 Research and development (uncontrollable) 315 Depreciation expense 16,000 Net income/(loss) ? Cost of goods sold 119,070 Selling expense 1,250 Total expenses ? Marketing costs (uncontrollable) 780 Administrative expense 700 Income tax expense (21% of pretax income) ? Other expenses 330 A. Prepare the income statement using the above information. Round your answers to the nearest dollar. BDS Enterprises Income Statement For the Year Ended Dec. 31, 20xx Sales $fill in the blank c8599b09205f02e_2 Cost of…