Quiz – Construct an Income Statement
In 2021, LOL Private Ltd. (a hardware retail company) sold 10,000 units of its product at an average price of $400 per unit. The company reported return goods in 2021 of $200,000.
LOL purchased 11,000 units of its product from its manufacturer in 2021 at an average cost of $300 per unit.
Operating expenses (excluding depreciation) for LOL, Inc. in 2021 were $400,000 and depreciation expenses were $100,000.
LOL had $2,000,000 in debt outstanding throughout all of 2021. This debt carried an average interest rate of 10%.
Finally, LOL’s tax rate was 25 percent.
LOL’s fiscal year runs from January 1 through December 31.
Given this information, construct LOL’s 2021 income statement.
| Revenue | |
| Cost of goods sold | |
| Gross profit | |
| Operating expenses (excl. depreciation) | |
| Depreciation expense | |
| Operating income | |
| Interest expense | |
| Income Before Taxes | |
| Income Taxes | |
| Net income |
Here is the answer of this exercise.
