bus500 slp3

We reviewed the balance sheet for VWV in the prior module. This time we are examining the income statement for the same entity.

VWV Company

Income Statement

For the Period Ending December 31, 20XX



Cost of goods sold


Gross profit


Operating expenses



Lease for office


Advertising and promotion




Property taxes


Payroll taxes






Miscellaneous expenses


Total operating expenses


Operating income


Interest income


Interest expense


Net interest expense


Net income


Use the above income statement to answer the questions below.

  1. Is VWV a manufacturer/reseller or a service company?
  2. Explain the term cost of goods sold in your own words. Why is this item significant?
  3. Does the company have employees?
  4. Does the company own some type of property? Can we tell from looking at the income statement alone or do we need to look at the balance sheet too?
  5. Are earnings per share important information for VWV Company?
  6. How is depreciation computed and what is the purpose of including depreciation expense?
  7. How do the dividends affect the income statement?
  8. How do we know that VWV Company is using the accrual basis of accounting? Hint: Do not forget to look at the balance sheet from the prior module.
  9. Why is the company using the accrual basis of accounting rather than the cash basis?
  10. Comment on operating income versus net income.

SLP Assignment Expectations

Use Word and respond in a question-and-answer format. There is no need to use Excel for this particular SLP.

Privacy Policy | Cont

"Looking for a Similar Assignment? Get Expert Help at an Amazing Discount!"
Looking for a Similar Assignment? Our Experts can help. Use the coupon code SAVE30 to get your first order at 30% off!