Section 2. Income Statement (Chapter 11 Pg 279) The statement of operations, also known as the income statement, profit-and-loss statement, or P&L statement, summarizes the revenue (or income) and expenses of a company on a monthly basis for one year or on an annual basis for several years. It divides expenses into broad categories, such as cost of goods sold and operating expenses. An example of a company's Annual Income Statement is given below: Example of Pro Forma Income Statement in SR 000s) 2020 2021 Sales A 605 726 Cost of the items B 349.5 406.6 Gross Profit C=A-B 255.5 319.4 Rand D D 100.4 108.9 Administration E 106.9 123.41 Income FEC-(DUE) 48.2 87.1 Financial charges G 19.7 19 Profit before Tax H=F-G 28.5 68.1 Taxes (35%) I=0.35*H 9.975 23.835 Profit after Tax J=H-1 18.525 44.265 Question 2. ALNOOR watches provides customers with Muslim Prayer call timings and Qibla direction. The total manufacturing cost is 30 riyal per unit. An additional cost of 20 riyal per unit is for equipment maintenance and employee's salaries . 10 riyals per unit are spent on circuit components, accessories and property rents. The company sells 10,000 units annually on a sale price of 150 SR per unit. If the R and D and admin costs are 10,000, financial charges are 30,000, tax is 25%, prepare the annual Income statement. Example of Pro Forma Income Statement in SR 000s) Sales A Cost of the items B C=A-B D F=C-D Gross Profit Rand D and Admin Income Financial charges Profit before Tax Taxes (25%) Profit after Tax G H=F-G 1=0.25*H J=H-1