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Sales (amount of money you made selling your product/service)
Cost of Goods Sold (how much you spent on the materials for your product/service)
Gross Profit (how much total money you made from sales minus materials)
Selling and Administrative Expenses (how much it cost you to run your business)
Earnings before Interest and Taxes (how much you earned before interest & taxes)
Interest (% you have to pay on your earnings)
Taxable Income (amount of money you made which is used to calculate taxes due)
Taxes (amount of money you owe the government based on your income)
Net Income (total amount of money you made after subtracting interest and taxes)
Dividends (amount of money you pay to stockholders—if your company sells stock)
Transfer to Retained Earnings (final net income you record) |
$ 6,800
$ 4,300
$ 2,500
$ 1,300
$ 1,200
$ 200
$ 1,000
$ 350
$ 650
$ 200
$ 450
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[line 1]
[line 2]
[line 3 = line 1 – line 2]
[line 4]
[line 5 = line 3 – line 4]
[line 6]
[line 7 = line 5 – line 6]
[line 8]
[line 9 = line 7 – line 8]
[line 10]
[line 11 = line 9 – line 10] |
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Income Statement Exercise
Put your Income Statement knowledge to the test! Come up with your own business name and use the following information to complete the Income Statement! Good Luck!!
Date to use for Income Statement: Period Ending December 31, 2004
You made $11,460 in sales from selling your product/service
You spent $5,290 to buy the materials needed to make/sell your product/service
You paid $3,130 to your workers
Interest cost you $420
You paid the government $650 in taxes
With the money left over, you were able to pay dividends of $380
What is your final income at the end? Do the income statement to find out!
Good Luck! |
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Sales
Cost of Goods Sold
Gross Profit
Selling and Administrative Expenses
Earnings before Interest and Taxes
Interest
Taxable Income
Taxes
Net Income
Dividends
Transfer to Retained Earnings |
$ 11,460
$ 5,290
$ 6,170
$ 3,130
$ 3,040
$ 420
$ 2,620
$ 350
$ 2,270
$ 650
$ 1,620 |
[line 1]
[line 2]
[line 3 = line 1 – line 2]
[line 4]
[line 5 = line 3 – line 4]
z[line 6]
[line 7 = line 5 – line 6]
[line 8]
[line 9 = line 7 – line 8]
[line 10]
[line 11 = line 9 – line 10] |