The Statement of Comprehensive Income provided below was obtained from the accounting records of Dreamonline Limited:

Statement of Comprehensive Income for the year ended 31 August 2018 (Extract)

	R
Sales	5 000 000
Cost of sales	(1 900 000)
Gross profit	3 100 000
Operating expenses	(700 000)
Operating profit	2 400 000
Interest income	50 000
Interest expense	?
Profit before tax	2 200 000
Income tax	(630 000)
Net profit	1 570 000

Required:

2.1 Explain six (6) reasons why shareholders and financial managers would be interested in the Statement of Comprehensive Income

2.2 Calculate the interest expense for the year ended 31 August 2018

2.3 Explain the accounting treatment of sales returns and allowances

2.4 Interest has been calculated at 8% per year on the amount invested. Assume that there was no change in investments during the year, determine the value of the investment

2.5 Which method of depreciation will result in lower net profit in the early years of the life of the asset?

2.6 Of what significance is the operating profit to investors?

Answer rating: 100% (QA)

Answers to Dreamonline Limiteds Statement of Comprehensive Income Questions 21 Reasons for Shareholder and Financial Manager Interest in the Statement of Comprehensive Income SOCI Profitability Analys... View the full answer