Use the following information to answer the questions below.
CATERPILLAR INC. Statement of Income for a Recent Year
Total sales and revenues......................................................................................$55,184,000
Less: Cost of products sold...................................................................................$40,391,000
Gross profit.......................................................................................,....................$ 14,793,000
Less: Operating costs :
Selling, general, and administrative expenses................................................ $ 5,697,000
Research and development expenses............................................................$2,135,000
Other operating expenses...............................................................................$1,633,000
Total operating costs.............................................................................................$ 9,465,000
Operating profit.....................................................................................................$ 5,328,000
Less: Other expenses............................................................................................245,000
Consolidated profit before taxes..........................................................................$ 5,083,000
Provision for income taxes....................................................................................1,380,000
Profit of consolidated companies.........................................................................$ 3,703,000
WAL-MART STORES, INC.
Statement of Income for a Recent Year Value
Total revenues.......................................................................................................$485,651,000
Less: Cost of sales.................................................................................................$365,086,000
Gross profit............................................................................................................$120,565,000
Less: Operating, selling, general. and administrative expenses......................... 93,418,000
Operating income.................................................................................................$ 27,147,000
Less: Interest expense, net...................................................................................2,348,000
Income from continuing operations before income taxes................................... $ 24,799,000
Provision for income taxes....................................................................................(7 ,985,000)
Income from discontinued operations, net of tax................................................ 285,000
Consolidated net income......................................................................................$ 17,099,000
SOUTHWEST AIRLINES CO.
Statement of Income for a Recent Year
Operating revenue:
Passenger.........................................................................................................$ 17,658,000
Freight...............................................................................................................175,000
Other.................................................................................................................772,000
Total operating revenue...................................................................................$ 18,605,000
Less: Operating expenses:
Salaries, wages, and benefits..........................................................................$ 5,434,000
Fuel and oil.......................................................................................................5,293,000
Maintenance materials and repairs.................................................................978,000
Aircraft rentals...................................................................................................295,000
Landing fees and other rentals........................................................................1,111,000
Depreciation and amortization.........................................................................938,000
Acquisition and integration..............................................................................126,000 .
Other operating expenses...............................................................................2,205,000
Total operating expenses.................................................................................$ 16,380,000
Operating income.................................................................................................$ 2,225,000
Other expenses (income):
Interest expense...............................................................................................$ 130,000
Capitalized interest...........................................................................................(23,000)
Interest income.................................................................................................(7,000)
Other (gains) losses, net·······································'···········································309,000
Total other expenses (income).........................................................................$ 409,000
Income before income taxes................................................................................$ 1,816,000
Provision for income taxes....................................................................................680,000
Net income............................................................................................................$ 1, 136,000
ANSWER THESE QUESTIONS USING THE ABOVE INFORMATION:
1. List the major differences between the income statementsshown for Catepillar Inc., Walmart and Southwest
2. Explain how cost-accounting data were used to prepare theseincome statements.
3. On the income statement for where would the ticket agents'salaries be shown? Where would the costs of the computer equipmentused to keep track of reservations be included on thestatement?
4. On the income statement for where would the cost of newspaperadvertising be shown? How about the cost of merchandise?
5. Where would the salary of the brand manager who plansadvertising for equipment be shown? How about the salary of aproduction employee? Where would the cost of the raw materials usedin the company's products be included on the statement?
Use the following information to answer the questions below.
CATERPILLAR INC. Statement of Income for a Recent Year
Total sales and revenues......................................................................................$55,184,000
Less: Cost of products sold...................................................................................$40,391,000
Gross profit.......................................................................................,....................$ 14,793,000
Less: Operating costs :
Selling, general, and administrative expenses................................................ $ 5,697,000
Research and development expenses............................................................$2,135,000
Other operating expenses...............................................................................$1,633,000
Total operating costs.............................................................................................$ 9,465,000
Operating profit.....................................................................................................$ 5,328,000
Less: Other expenses............................................................................................245,000
Consolidated profit before taxes..........................................................................$ 5,083,000
Provision for income taxes....................................................................................1,380,000
Profit of consolidated companies.........................................................................$ 3,703,000
WAL-MART STORES, INC.
Statement of Income for a Recent Year Value
Total revenues.......................................................................................................$485,651,000
Less: Cost of sales.................................................................................................$365,086,000
Gross profit............................................................................................................$120,565,000
Less: Operating, selling, general. and administrative expenses......................... 93,418,000
Operating income.................................................................................................$ 27,147,000
Less: Interest expense, net...................................................................................2,348,000
Income from continuing operations before income taxes................................... $ 24,799,000
Provision for income taxes....................................................................................(7 ,985,000)
Income from discontinued operations, net of tax................................................ 285,000
Consolidated net income......................................................................................$ 17,099,000
SOUTHWEST AIRLINES CO.
Statement of Income for a Recent Year
Operating revenue:
Passenger.........................................................................................................$ 17,658,000
Freight...............................................................................................................175,000
Other.................................................................................................................772,000
Total operating revenue...................................................................................$ 18,605,000
Less: Operating expenses:
Salaries, wages, and benefits..........................................................................$ 5,434,000
Fuel and oil.......................................................................................................5,293,000
Maintenance materials and repairs.................................................................978,000
Aircraft rentals...................................................................................................295,000
Landing fees and other rentals........................................................................1,111,000
Depreciation and amortization.........................................................................938,000
Acquisition and integration..............................................................................126,000 .
Other operating expenses...............................................................................2,205,000
Total operating expenses.................................................................................$ 16,380,000
Operating income.................................................................................................$ 2,225,000
Other expenses (income):
Interest expense...............................................................................................$ 130,000
Capitalized interest...........................................................................................(23,000)
Interest income.................................................................................................(7,000)
Other (gains) losses, net·······································'···········································309,000
Total other expenses (income).........................................................................$ 409,000
Income before income taxes................................................................................$ 1,816,000
Provision for income taxes....................................................................................680,000
Net income............................................................................................................$ 1, 136,000
ANSWER THESE QUESTIONS USING THE ABOVE INFORMATION:
1. List the major differences between the income statementsshown for Catepillar Inc., Walmart and Southwest
2. Explain how cost-accounting data were used to prepare theseincome statements.
3. On the income statement for where would the ticket agents'salaries be shown? Where would the costs of the computer equipmentused to keep track of reservations be included on thestatement?
4. On the income statement for where would the cost of newspaperadvertising be shown? How about the cost of merchandise?
5. Where would the salary of the brand manager who plansadvertising for equipment be shown? How about the salary of aproduction employee? Where would the cost of the raw materials usedin the company's products be included on the statement?
Related questions
Multiple-Step Income Statement
The Carlsbad Company income statement for the year ended February 28, 20Y8 contains errors:
| CARLSBAD COMPANY | |||||||||
| Income Statement | |||||||||
| For the Year Ended February 28, 20Y8 | |||||||||
| Sales | $4,220,000 | ||||||||
| Cost of goods sold | (2,650,000) | ||||||||
| Operating income | $1,930,000 | ||||||||
| Expenses: | |||||||||
| Selling expenses | $ 800,000 | ||||||||
| Administrative expenses | 600,000 | ||||||||
| Delivery expense | 50,000 | ||||||||
| Total expenses | (1,450,000) | ||||||||
| Other expense: | 480,000 | ||||||||
| Interest revenue | 40,000 | ||||||||
| Gross profit | 440,000 | ||||||||
Prepare a corrected income statement for Carlsbad Company for the year ended February 28, 20Y8.
| Carlsbad Company | |||
| Income Statement | |||
| For the Year Ended February 28, 20Y8 Sales Cost of goods sold Gross profit Expenses: Selling expenses Administrative expenses Delivery expense Total expenses Operating income Other revenue: Interest revenue Net income |
Period Ending | February 2 2007 | February 1 2008 |
| Total Revenue | 57,420,000 | 61,133,000 |
| Cost Of Revenue | 47,904,000 | 49,462,000 |
| Gross Profit | 9,516,000 | 11,671,000 |
| Operating Expenses | ||
| Research and Development | 498,000 | 610,000 |
| Selling, general, Administrative | 5,948,000 | 7,538,000 |
| Total Operating expenses | 6,446,000 | 8,148,000 |
| Operating Income or Loss | 3,070,000 | 3,523,000 |
| Net Income | 2,583,000 | 2,947,000 |
Estimate the total variable costs for Dell in the Year endingFeb 2 2007?
Estimate the Fixed to Variable cost ratio for Dell for the yearending Feb 1 2008?
Assume the variable COGS is 0.419607 in 2008. Estimate the totalfixed cost of goods sold for that year?
