Question:
Branson Electronics Company is a small, publicly traded company preparing its first quarter interim
report to be mailed to shareholders. The following information for the quarter has been compiled:
Revenues $180,000
Cost of goods sold 35,000
Operating expenses:
Fixed $59,000
Variable 48,000 107,000
Fixed operating expenses include payments of $50,000 to an advertising firm to promote the firm through
various media throughout the year. The income tax rate for the firm’s level of operations in the first
quarter is
30%, but management estimates the effective rate for the entire year will be 36%.
Required:
Prepare the income statement to be included in Branson’s first quarter interim report.
Answer:
Branson Electronics Company
Income Statement
Revenues $180,000
Cost of goods sold 35,000
Gross profit 145,000
Advertising expense1 (12,500)
Other operating expenses2 (57,000)
Branson Electronics Company is a small, publicly traded company preparing its first quarter interim
report to be mailed to shareholders. The following information for the quarter has been compiled:
Revenues $180,000
Cost of goods sold 35,000
Operating expenses:
Fixed $59,000
Variable 48,000 107,000
Fixed operating expenses include payments of $50,000 to an advertising firm to promote the firm through
various media throughout the year. The income tax rate for the firm’s level of operations in the first
quarter is
30%, but management estimates the effective rate for the entire year will be 36%.
Required:
Prepare the income statement to be included in Branson’s first quarter interim report.
Answer:
Branson Electronics Company
Income Statement
Revenues $180,000
Cost of goods sold 35,000
Gross profit 145,000
Advertising expense1 (12,500)
Other operating expenses2 (57,000)
