The statement below is likely from which of the following type of business and form of organisation:Income StatementFor the year ended 30th Junerevenue$250 000 Cost of salesGross profitExpenses:Selling expensesFinancing expensesGeneral & administrative expensesTotal expensesNet profit before taxIncome tax expenseNet profit after tax100 000 50 00010 00050 000 150 000 110 00040 00012 00028 000Question 9Answera.a service companyb.a merchandising sole-proprietorshipc.a merchandising partnershipd.a merchandising companye.a service sole-proprietorship
Question
The statement below is likely from which of the following type of business and form of organisation:Income StatementFor the year ended 30th Junerevenue$250 000 Cost of salesGross profitExpenses:Selling expensesFinancing expensesGeneral & administrative expensesTotal expensesNet profit before taxIncome tax expenseNet profit after tax100 000 50 00010 00050 000 150 000 110 00040 00012 00028 000Question 9Answera.a service companyb.a merchandising sole-proprietorshipc.a merchandising partnershipd.a merchandising companye.a service sole-proprietorship
Solution
The statement is likely from a merchandising company. Here's why:
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The presence of "Cost of Sales" in the income statement: This is a direct cost associated with the goods or services a company sells and is a common line item in the income statements of companies that sell goods, i.e., merchandising companies.
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The absence of any mention of partners or sole-proprietorship: The income statement does not mention any distribution of profits among partners or a sole proprietor, which suggests that it's not a partnership or sole-proprietorship.
Therefore, the answer is d. a merchandising company.
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