Reference no: EM132980850

PROBLEM 1 - In 2005, ABC, Inc. (a hardware retail company) sold 10,000 units of its product at an average price of PhP20,000 per unit. The company reported estimated Returns and Allowances in 2005 of PhP10,000,000. ABC actually purchased 11,000 units of its product from its manufacturer in 2005 at an average cost of PhP15,000 per unit. ABC began 2005 with 900 units of its products in inventory (carried at an average cost of PhP15,000 per unit). Operating expenses (excluding depreciation) for ABC, Inc. in 2005 were 20,000,000 and depreciation expense was PhP5,000,000. ABC had PhP100,000,000 in debt outstanding throughout all of 2005. This debt carried an average interest rate of 10 percent. Finally, ABC's tax rate was 40 percent. ABC's fiscal year runs from January 1 through December 31. Given this information, construct ABC's 2005 income statement.

PROBLEM 2 - Please prepare income statement for the Wear Me Company (a clothing retailer) for the year ending December 31, 2015 given the information below:

Advertising expenditures 68,000

Beginning Inventory 256,000

Depreciation 78,000

Ending Inventory 248,000

Gross Sales 3,210,000

Interest Expense 64,000

Lease Payments 52,000

Management Salaries 240,000

Materials Purchases 2,425,000

R&D expenditures 35,000

Repairs & Maintenance costs 22,000

Returns and allowances 48,000

Taxes 51,000