StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...
Free

Income Statement of the Organization - Essay Example

Cite this document
Summary
This essay "Income Statement of the Organization" focuses on an income statement of the organization which presents the profitability of the organization and it explains the revenues that the company has generated. Superior Manufacturing Company is a production firm…
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER93.1% of users find it useful
Income Statement of the Organization
Read Text Preview

Extract of sample "Income Statement of the Organization"

Income ment Cost of goods sold   Finished goods inventory, beginning $ 120,000.00 Add: cost of goods manufactured $ 200,000.00Cost of goods available for sale $ 320,000.00 Less: finished goods inventory, ending $ 60,000.00 Cost of goods sold $ 260,000.00   Sales $ 680,000.00 Less: cost of goods sold $ 260,000.00 Gross profit $ 420,000.00 Administrative expenses $ 70,000.00 Selling expenses $ 40,000.00 Earnings before tax $ 310,000.

00 Tax expenses $ 93,000.00 Net income $ 217,000.00 Income statement of the organization presents the profitability of the organization and explains the revenues that the company has generated and the costs it has incurred (McLaney, 2009). Superior Manufacturing Company is a production firm whose income statement indicates that the company generated an income of $217,000 in 2011. Its cost of goods sold is accumulated at $260,000; however, this lacks the calculation of applied overheads.

Being a manufacturing company, it has to record the variance between the actual overhead costs and budgeted overhead costs. The cost of goods sold is directly related to the manufacturing of products by the company; hence, it must incur overapplied or underapplied overhead costs in the calculation of the cost of goods sold. The company has earned a viable net income after deducting all the expenses. The financial position of the manufacturing company seems to be sound in 2011. The revenues for the year are summed up at $680,000 and gross profit is accumulated at $420,000.

The company can increase its income for the year by lessening the sales expenses and the operating and administrative expenses. The administrative expenses of the company totaled $70,000 and the sales expenses are accumulated at $40,000. Superior Manufacturing Company can reduce its administrative expenses by investing more in technology, outsourcing business processing and technological advancements, automating the functions of customer service by using online systems, etc. This will help the company to increase its net income.

Summing up, the company has a stable financial position and can improve more in the coming years by cutting down its expenses.

Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Income Statement Essay Example | Topics and Well Written Essays - 250 words”, n.d.)
Retrieved from https://studentshare.org/finance-accounting/1655369-income-statement
(Income Statement Essay Example | Topics and Well Written Essays - 250 Words)
https://studentshare.org/finance-accounting/1655369-income-statement.
“Income Statement Essay Example | Topics and Well Written Essays - 250 Words”, n.d. https://studentshare.org/finance-accounting/1655369-income-statement.
  • Cited: 0 times

CHECK THESE SAMPLES OF Income Statement of the Organization

Income statement and balance sheet

The four major financial statements are the income statement, balance sheet, statement of cash flow, and statement of stockholders equity.... The balance sheet is considered a statement of position.... The purpose of this paper is to analyze and describe the income statement and the balance sheet.... The income statement and the balance sheet are two interrelated statements.... The outcome of the income statement affects the equity account of the balance sheet....
3 Pages (750 words) Essay

Financial statements

The similarity in all these financial records is that they serve to indicate the financial situation of the organization after its interaction with the other stakeholders, in terms of assets, revenues, liabilities and expenditures (Wahlen, Bradshaw, Baginski & Stickney, 2010).... The balance sheets, income statements and the cash flow statements have a debit side, in which they record the expenditures and the reductions to the assets of the organization in terms of the outgoing money....
4 Pages (1000 words) Research Paper

The six Qualitative Characteristics proposed in Phase A of the joint IASB/FASB review

Financial reporting like financial statements usually does not exhibit the performance of the management and the entity as two separate aspects (International Financial Reporting Standards, 2012).... The success or failure of an entity is directly linked to various factors.... .... ... ... The framework is a system of interconnected fundamentals and objectives that prescribes the limitations, functions and nature of financial reporting....
14 Pages (3500 words) Coursework

International Accounting Standards

At the end of the year, depreciation is charged to the Income Statement of the Organization.... the organization must state the method used to measure the asset in the disclosure section of the financial statements.... To explain the concept, certain examples have been discussed for a hypothetical organization....
9 Pages (2250 words) Essay

Comparing Income Statements From Different Industries

There are three major sections of an income statement, one describing incomes, second is cost of goods (expenses) and third projecting depreciations, taxes and interests.... The income statement projected that the company had 17% gross profit margin out of the total revenue at the end of the business year 2011.... The company projected net profit margins of 15% with gross profits of 64 % of the total revenue in its annual income statement 2011 (Bloomberg, 2012)....
2 Pages (500 words) Essay

Financial Statements and Concepts of Capital Maintenance

A balance sheet is a statement of the financial position of an organization.... An income statement reports the organization's profits, expenses, and income over a while.... Information in a financial statement is presented in a simple structured form easy to understand, either as a balance sheet, income statement, or a statement of cash flows.... A statement of cash flows reports on an organization's cash flow activities, which include its processing, financing, and investing activities....
7 Pages (1750 words) Essay

Financial Management in Nonprofit Organizations

the organization is headed by a management team and none of the shareholders benefit financially from the business operations although they can be paid a management fee for their roles in running the organization (Periasamy, 2009).... The author of the paper titled "Financial Management in Nonprofit Organizations" considers the various aspects of accounting such as the source of funds, debt, performance evaluation, and how each type of organization treats its assets and liabilities....
7 Pages (1750 words) Coursework

The Computation and Adjustments of Statement of Financial Position and Income Statement

It then presents the analysis of the two financial statements of the organization.... The paper outlines the computation and adjustments of the two financial statements (statement of financial position and income statement) using the additional information.... The paper "The Computation and Adjustments of statement of Financial Position and Income Statement" is a great example of a finance and accounting report.... The paper outlines the computation and adjustments of the two financial statements (statement of financial position and income statement) using additional information....
6 Pages (1500 words)
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Contact Us