Exercise 58 In its income statement for the year ended Decem

Exercise 5-8 In its income statement for the year ended December 31, 2017, Crane Company reported the following condensed data. $511,500 1,085,700 Loss on disposal of plant assets Sales revenue Salaries and wages expenses Cost of goods sold Interest expense Interest revenue Depreciation expense 78,100 Income tax expense 71,500 Sales discounts 41,000 Utilities expense 91,850 2,431,000 27,500 176,000 121,000

Solution

CRANE COMPANY

Income Statement

For the year ended December 31,2017

Sales

Sales Revenue

$        4,862,000

Less: Sales Discounts

$            352,000

Net Sales

$  4,510,000

Cost of Goods Sold

$  2,171,400

Gross Profit

$  2,338,600

Operating Expenses

Salaries and wages expenses

$        1,023,000

Utilities Expenses

$            242,000

Depreciation Expenses

$            682,000

$  1,947,000

Total Operating Expenses

$     391,600

Income from operations

Other Revenues and gains

Interest revenue

$     143,000

Other Expenses and Losses

Interest expense

$            156,200

Loss on Disposal of Plant

$            183,700

$     339,900

Income before Income taxes

$     194,700

Income tax expenses

$        55,000

Net income/(Loss)

$     139,700

Gross Profit %= Gross profit/ net sales = $2,338,600/4,510,000 x 100 = 51.85 %

Net profit % = Net income / net sales = $139,700/4,510,000 x 100 = 3.1 %

CRANE COMPANY
Income Statement
For the year ended December 31,2017
Sales
Sales Revenue	$        4,862,000
Less: Sales Discounts	$            352,000
Net Sales		$  4,510,000
Cost of Goods Sold		$  2,171,400
Gross Profit		$  2,338,600
Operating Expenses
Salaries and wages expenses	$        1,023,000
Utilities Expenses	$            242,000
Depreciation Expenses	$            682,000	$  1,947,000
Total Operating Expenses		$     391,600
Income from operations
Other Revenues and gains
Interest revenue		$     143,000
Other Expenses and Losses
Interest expense	$            156,200
Loss on Disposal of Plant	$            183,700	$     339,900
Income before Income taxes		$     194,700
Income tax expenses		$        55,000
Net income/(Loss)		$     139,700