HW BUSINESS 4

NAME:

DATE:

Income Statement Preparation Question

ABC Company has provided the following financial data for the fiscal year ended
December 31, 2023. Use this data to prepare the company's income statement for the
year.
 Sales Revenue: $150,000
 Cost of Goods Sold: $90,000
 Rent Expense: $10,000
 Salary Expense: $30,000
 Marketing Expense: $5,000
 Interest Expense: $2,000
 Depreciation Expense: $8,000
 Income Tax Rate: 25%
Instructions:
1. Calculate Gross Profit by subtracting Cost of Goods Sold from Sales Revenue.
2. Determine Total Operating Expenses by summing up Rent Expense, Salary
Expense, Marketing Expense, and Depreciation Expense.
3. Compute Operating Income by subtracting Total Operating Expenses from Gross
Profit.
4. Calculate Interest Expense and subtract it from Operating Income to find Pre-Tax
Income.
5. Finally, apply the Income Tax Rate to the Pre-Tax Income to determine Net
Income after taxes.
6. Organize the calculated figures into the structure of an income statement:
Revenues, Expenses, and Net Income.