Accounting Mba
Autor: Jannisthomas • January 2, 2018 • 1,169 Words (5 Pages) • 665 Views
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Cash received 1,100,000
Expenses for the year 1,200,000
Paid expenses 950,000
To get the net income there are two bases:
- The accrual base:
Net income for year 2014 = Revenues - Expenses
= 1,500,000 - 1,200,000
= 300,000 $
- The Cash base:
Net income for year 2014 = Revenues - Expenses
= 1,100,000 - 950,000
= 150,000 $
Case 1:
Given the following information for Cairo Services at 12/31/2014:
Services revenue 1,200,000
Interest revenue 10,000
Rent expenses 60,000
Salaries expenses 220,000
Supplies expenses 40,000
Loss in sell of machine 50,000
Depreciation expenses 30,000
General expenses 250,000
Salaries of December not yet paid or calculated.
Taxes 20%
Answer:
[pic 56][pic 57][pic 58]
Cairo Services[pic 59][pic 60]
Income Statement[pic 61]
For the year ended 12/31/2014
Subtotal
Total
-
Revenue & Gains
Services revenue
1,200,000
Interest Revenue
10,000
1,210,000
-
Expenses & Losses
Rent Expenses
60,000
Salaries expenses [pic 62]
240,000
Supplies expenses
40,000
Loss sell of machine
50,000
Depreciation expenses
30,000
General expenses
250,000
(670,000)
-
Pretax income
540,000
-
Income Tax (20%)
(108,000)
-
Net Income
432,000
What are the non-operating Revenues & Expenses?
- Non-operating Revenues:
- Interest revenue
- Rent revenue
- Dividends income (from holding shares in another company)
- Gains on sales of an asset (Land, Building, Machine…), not inventory.
- Non-operating Expenses:
- Interest expenses
- Casual losses (fire, flood…)
- Loss on sales of an asset (Land, Building, Machine…), except inventory.
- Multiple-step income statement:
- It differentiates between operating and non-operating revenues & expenses.
Taken the last case as an example
Cairo Services
Income Statement
For the year ended 12/31/2014
Subtotal
Total
-
Operating Revenue
Services revenue
1,200,000
1,200,000
-
Operating Expenses
Rent Expenses
60,000
Salaries expenses [pic 63]
240,000
Supplies expenses
40,000
Depreciation expenses
30,000
General expenses
250,000
(620,000)
-
Pretax operating income
580,000
-
Non-Operating Revenues & gains
Interest revenue
10,000
10,000
-
Non-Operating Expenses
Loss sell of machine
50,000
(50,000)
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