Question

Tart Inc. had the following data: Sales of                                    &

Tart Inc. had the following data:

  • Sales of                                       $450,000
  • Beginning Inventory                      45,000
  • Selling Expenses                            35,000
  • Dividends                                         5,000
  • Ending Inventory                           25,000
  • Tax Rate                                               25%
  • Purchases                                     165,000
  • Administrative Expenses               32,000
  • Accounting Change, gross               7,500
  • Interest                                            10,000
  • Purchase of Equipment                  30,000

Required: prepare an income statement for Tart, Inc.

Business   Accounting   
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Homework Answers

Answer #1

Notes

a) Calculation of Cost Of Goods Sold

b) Income Tax = (265000 - 32000- 7500-10000-35000) x 0.25

= 180500 x 0.25

= 45125

c) Purchase of Equipment is capital expenditure and will not be reflected in the Income statement

d) Since no information related to  Depreciation is given it has been ignored.

Please like the answer...............comment for doubts.................thank you

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