Manufacturer's income statement: alternative expense classi?cation
Narcissus makes mirrors. N asks for your help in preparing an income statement for the third quarter of x2, using the information below. The company is short-staffed and N is preoccupied with quality inspection.
Quarter 3, x2
|
In B000
Raw materials
|
Start
13
|
End
9
|
|
Work-in-progress
|
22
|
15
|
|
Finished mirrors
|
21
|
34
|
During quarter 3, x2
|
|
Production
department
|
Sales and admin.
departments
|
|
Materials purchased
|
50
|
-
|
|
Supplies purchased and used
|
-
|
2
|
|
Salaries and employee benefits
|
46
|
28
|
|
Depreciation
|
23
|
11
|
|
Utilities and other overheads
|
8
|
4
|
The company sells 25,000 mirrors at a unit price of A8. The corporate income tax rate is 30%.
Required
(a) Calculate Narcissus Company's gross profit for quarter 3, x2.
(b) Draw up an income statement for Narcissus Company for the third quarter of x2. Assume the company classifies expenses:
(i) by function; and
(ii) by nature.