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The following relates to CAREBEAR INC for the year ended 2021
Operating income P1,200,000
Net sales 3,000,000
Income before tax 1,000,000
Income from discontinued operations 600,000
Additional information:
Gross profit is 70% of net sales
The income tax rate is 40%. Income from discontinued operation is gross tax.
Requirements:
1. Under nature of expense presentation, how much is the company's operating expense?
2. Under nature of expense presentation, how much is the company's interest expense?
3. What is the total tax expense presented in the statement of comprehensive income for the year 2021?

Sagot :

Guineveremain0153idn

Step-by-step explanation:

To calculate the required figures for CAREBEAR INC for the year ended 2021 based on the provided information:

1. Operating Expense Calculation:

- Gross Profit = 70% of Net Sales

- Gross Profit = 0.70 * 3,000,000 = 2,100,000

- Operating Expense = Net Sales - Gross Profit - Operating Income

- Operating Expense = 3,000,000 - 2,100,000 - 1,200,000 = 700,000

Therefore, the company's operating expense for the year 2021 under the nature of expense presentation is P700,000.

2. Interest Expense Calculation:

- Income before Tax = Operating Income + Income from Discontinued Operations

- Income before Tax = 1,200,000 + 600,000 = 1,800,000

- Interest Expense = Income before Tax - Operating Income - Net Sales

- Interest Expense = 1,800,000 - 1,200,000 - 3,000,000 = -1,400,000

Given that the interest expense is a negative value, it indicates that CAREBEAR INC did not have any interest expense for the year 2021, according to the nature of expense presentation.

3. Total Tax Expense Calculation:

- Income before Tax = Operating Income + Income from Discontinued Operations

- Income before Tax = 1,200,000 + 600,000 = 1,800,000

- Total Tax Expense = Income before Tax * Tax Rate

- Total Tax Expense = 1,800,000 * 40% = 720,000

Therefore, the total tax expense presented in the statement of comprehensive income for the year 2021 for CAREBEAR INC is P720,000.

These calculations provide clarity on the operating expense, interest expense, and total tax expense for CAREBEAR INC for the year 2021 based on the given financial data.

Note: The negative interest expense suggests that the company did not incur any interest expenses during the period.

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