Oskar Horn:
Sales revenue (5,000 units
at $4.00)
$4 x $5,000
$20,000
Cost of goods sold ( at
$1.60 per unit)
$1,60 x $5,000
$8,000
Gross profit
Gross profit=sales-cost of
goods sold
$12,000
Overhead expenses
$5,000
Operating profit (before tax
and interest)
Operating profit=gross
profit- overheads
$7,000
Interest
50% of 200
$1,000
Profit before tax
Profit after tax= profit
before tax-tax
$6,000
Corporation Tax @ 25%
25% of 6000
$1500
Profit for the year
=profit before share taxes
$4500
Dividends paid
Dividends
$1,200
Retained profit
Retained profit=profit after
tax-dividends
$3,300
$20,000 - $8000 = $12,000
12,000 - $5000 = $7000
$7000 - $1000 = $6000
$6000 - $1500 = $4500
$4500 - $1200 = $3300
