Question

ÂServices, Inc., began 2016 with total assets of $235 million and ended 2016 with assets of $355 million. During 2016, O'Conner Services earned revenues of $397 million and had expenses of $164 million. âServices, Inc., paid dividends of $29 million in 2016.

Required:
Prepare the company's income statement for the year ended December 31, 2016, complete with an appropriate heading.

Answer 1

Net profit $233 million

Step-by-step explanation:

The general structure of an income statement is as seen below

Revenue/Sales +

Cost of goods sold (-)

= Gross profit

Marketing , advertising, and promotion expenses (-)

General and administrative expenses (-)

= EBITDA

Depreciation and amortization expenses (-)

= Operating income or EBIT

Interest(-)

Other expenses(-)

= EBT (Pre tax income)

Income taxes(-)

= Net income

In the above exercise ,

Total revenues = $397 million

Total expenses = $164 million

Net profit = $233 million

Here, we will not include dividend in the computation of income statement