problem 1 information about space travel corporation which sells rocket engines is s 4352207

 

PROBLEM

1.Information about Space Travel Corporation, which sells rocket engines, is shown below:

Common shares outstanding150,000

Advertising expense$  9,000

Cost of goods sold330,000

Depreciation expense13,500

Income tax expense15,000

Income tax payable7,500

Interest expense6,000

Payments to owners4,500

Retained earnings37,500

Salaries expense45,000

Sales revenue450,000

Required:

Compute (a) gross profit, (b) income from operations, (c) net income and (d) earnings per share for the period.

2.Sandovar Company reported the following income statement for June 2007:

Sandovar Company

Income Statement

For the Month Ended June 30, 2007

Sales$736,000

Cost of sales552,000

$184,000

Selling expense88,000

General and administrative expense54,000

Other income and expense, net(22,000)

120,000

Income before income taxes64,000

Provision for income tax20,000

$ 44,000

$4.40

Required:

Determine (a) gross profit, (b) product cost expensed during year, (c) non-product operating expenses, (d) operating income, (e) net income and (f) earnings per share.

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