ABC Company Income Statement For the Period Ending December 31, 20xx Revenues Cost of sales Gross...

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ABC Company Income Statement For the Period Ending December 31, 20xx Revenues Cost of sales Gross profit Operating expenses Salaries Lease for office Advertising and promotion Utilies Property taxes Payroll taxes Insurance Depreciation Miscellaneous expenses Total operating expenses Operating income Interest income Interest expense Net interest expense Net income $ $ $ $ $ $ S $ $25,000 200,000 325,000 100,000 30,000 24,000 12,750 18,000 11,500 8,000 20,000 9.000 233,250 91,750 250 15,000 14,750 77,000 Answer the questions below and explain your answer with numbers, computations, or a sentence or two. 5. There is an error in the income statement. Property taxes are overstated by $10,000. How is the income statement affected by a correction of property taxes? 6. What happens to net income if the company hires a new manager at a salary of $80,000? 7. Does the company own any equipment? Is it informative to also check the balance sheet to answer this question? Explain. 8. Does the company have debt? How much debt? Explain how the income statement and balance sheet provide answers to the questions? ABC Company Income Statement For the Period Ending December 31, 20xx Revenues Cost of sales Gross profit Operating expenses Salaries Lease for office Advertising and promotion Utilies Property taxes Payroll taxes Insurance Depreciation Miscellaneous expenses Total operating expenses Operating income Interest income Interest expense Net interest expense Net income $ $ $ $ $ $ S $ $25,000 200,000 325,000 100,000 30,000 24,000 12,750 18,000 11,500 8,000 20,000 9.000 233,250 91,750 250 15,000 14,750 77,000 Answer the questions below and explain your answer with numbers, computations, or a sentence or two. 5. There is an error in the income statement. Property taxes are overstated by $10,000. How is the income statement affected by a correction of property taxes? 6. What happens to net income if the company hires a new manager at a salary of $80,000? 7. Does the company own any equipment? Is it informative to also check the balance sheet to answer this question? Explain. 8. Does the company have debt? How much debt? Explain how the income statement and balance sheet provide answers to the questions?

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