A Partial Income Statement for a Company's Most Recent Fiscal

question 45

Essay

A partial income statement for a company's most recent fiscal year follows: $\begin{array} { | l | l | } \hline \text { Sales } & \$ 800,000 \\\hline \text { Inventory, January 1 } & \$ 420,000 \\\hline \text { Add purchases } & ( \mathrm { a } )\underline{\quad\quad} \\\hline \text { Goods available for sale } & \text { (b) } \underline{\quad\quad} \\\hline \text { Inventory, December } 31 & 470,000 \\\hline \text { Cost of goods sold } & \text { (c) }\underline{\quad\quad} \\\hline \text { Gross margin } & 250,000 \\\hline \text { Deduct expenses: } & \\\hline \text { Selling } & \text { (d) }\underline{\quad\quad} \\\hline \text { Administrative } & \text { (e) } \underline{\quad\quad}\\\hline \text { Income before taxes } & \text { (f) }\underline{\quad\quad} \\\hline \text { Income taxes } & \text { (g) } \underline{\quad\quad}\\\hline \text { Net income } & \text { (h) }\underline{\quad\quad} \\\hline \text { Earnings per share } ( 5,000 \text { shares outstanding) } & \$ 4.20 \\\hline\end{array}$ Additional data:
Selling expenses are 20 percent of sales, administrative expenses are 10 percent of cost of goods sold; the income tax rate is 40 percent.
Required:
Supply dollar amounts for blanks a through h.

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Definitions:

Corporate Capitalism

An economic and political system characterized by the dominance of large corporations in economic and policy-making processes.

Medicare

A federal health insurance program in the United States primarily for people who are 65 or older, along with certain younger people with disabilities.

Economic Equality

The principle or aim of ensuring fair distribution of wealth and opportunity among all members of a society, reducing income disparity.

Political Efficacy

A citizen's belief that they can understand and influence political affairs, reflecting confidence in their ability to effect change in government.