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Contemporary Mathematics for Busin...

8th Edition
Robert Brechner + 1 other
ISBN: 9781305585447

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BuyFindarrow_forward

Contemporary Mathematics for Busin...

8th Edition
Robert Brechner + 1 other
ISBN: 9781305585447
Textbook Problem

Calculate the missing income statement items for Exercise 9, CVS Caremark; Exercise 10, AutoZone; and Exercise 11, PetSmart. Complete each company's column; then move on to the next column.

THE INCOME STATEMENT

Company Year Ended AutoZone December 31,2014 (in thousands)
Revenue $9,475,313
Cost of Goods Sold ___________
Gross Margin 4,934,907
Operating Expenses 3,104,684
Income before Taxes ___________
Income Tax* ___________
Net Income (loss) 1,069,744

*Also includes interest expense and other income and losses.

To determine

To calculate: The cost of goods sold, income before taxes and income tax of AutoZone if gross margin is $4,934,907, revenue is $9,475,313, net income (loss) is $1,069,744 and operating expense is $3,104,684.

Explanation

Given Information:

AutoZone’s gross margin is $4,934,907, revenue is $9,475,313, net income (loss) is $1,069,744 and operating expense is $3,104,684.

The Income Statement
Company Year Ended AutoZone December 31,2014 (in thousands)
Revenue $9,475,313
Cost of Goods Sold _________
Gross Margin $4,934,907
Operating Expenses $3,104,684
Income before Taxes _________
Income Tax ________
Net Income(loss) $1,069,744

Formula used:

The gross margin is computed by subtracting cost of goods sold from total revenue.

Gross margin=Total revenueCost of goods sold

The equation can be reformed to compute the cost of goods sold

Cost of goods sold=Total revenueGross margin

The income before taxes is computed by subtracting total operating expense from gross margin.

Income before taxes=Gross marginTotal operating expense

The net income (loss) is computed by subtracting income tax from income before taxes

Net income(loss)=Income before taxesIncome tax

The equation can be reformed to compute income tax.

Income tax=Income before taxesNet income(loss)

Calculation:

Consider AutoZone’s gross margin is $4,934,907, revenue is $9,475,313, net income (loss) is $1,069,744 and operating expense is $3,104,684

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