Chapt 21 - Income Statement Practice 2 (exam further)

A business has the following financial information: - Revenue: $120,000 - Cost of Sales: $60,000 - Expenses: $30,000 What is the Net Profit? (1 mark)

• $60,000

• $30,000

• $90,000

• $15,000

A company earned $500,000 in revenue and incurred the following: - Cost of Sales: $250,000 - Operating Expenses: $120,000 - Interest Paid: $10,000 What is the Net Profit Before Tax? (1 mark)

• $120,000

• $130,000

• $250,000

• $370,000

A business reports the following: - Revenue: $80,000 - Cost of Sales: $30,000 - Expenses: $20,000 - Tax Rate: 25% What is the Profit After Tax? (1 mark)

• $22,500

• $30,000

• $40,000

• $37,500

A company’s retained profit is calculated as follows: - Net Profit After Tax: $40,000 - Dividends Paid: $10,000 What is the Retained Profit? (1 mark)

• $50,000

• $40,000

• $30,000

• $10,000

A business wants to increase its net profit. Which of the following is the most effective way? (1 mark)

• Increase Cost of Sales

• Reduce Expenses

• Decrease Revenue

• Pay more tax

A company has: - Revenue: $200,000 - Cost of Sales: $100,000 - Expenses: $50,000 - Depreciation: $10,000 - Tax Rate: 30% What is the Net Profit After Tax? (1 mark)

• $40,000

• $35,000

• $30,000

• $28,000

Which stakeholder would be MOST interested in an income statement to check if a company can repay a loan? (1 mark)

• Employees

• Lenders

• Suppliers

• Customers

If a company’s net profit before tax is $120,000 and it has a 20% tax rate, what is its profit after tax? (1 mark)

• $24,000

• $100,000

• $96,000

• $120,000

What is the main reason suppliers might check a company’s income statement? (1 mark)

• To see if the company has enough profit to pay its debts

• To check how much tax the company is paying

• To determine how much they should charge for their products

• To evaluate how much money employees are being paid

A company wants to increase its retained profit. Which of the following actions would NOT help achieve this? (1 mark)

• Increase revenue

• Reduce expenses

• Pay more dividends to shareholders

• Find ways to cut production costs