Given the following information for the fiscal year ended June 30, 2001:
Product sales: 28,189,612
Service sales: 11,688,793
Cost of goods sold- products: 10,633,956
Cost of goods sold- services: 5,869,106
Operating expense: 14,904,460
Pre-tax operating income: 8,470,883
Income from continuing operations: 5,525,185
Net accounts receivable as of June 30: 7,212,970
Cost of goods sold % - products: 37.7%
Also this information was given as well.
For fiscal year ended June 30, 2000
Product sales: 22,226,504
Service sales: 5,891,909
Cost of goods sold- products: 8,033,867
Cost of goods sold- services: 2,974,456
Operating expense: 10,568,861
Pre-tax operating income: 6,541,229
Income from continuing operations: 4,301,742
Net accounts receivable as of June 30: 4,153,677
Cost of goods sold % - products: 36.1%
For fiscal year ended June 30, 2002
Product sales: 37,215,161
Service sales: 17,327,525
Cost of goods sold- products: 15,057,167
Cost of goods sold- services: 7,942,952
Operating expense: 20,809,281
Pre-tax operating income: 10,733,286
Income from continuing operations: 7,410,752
Net accounts receivable as of June 30: 20,316,730
Cost of goods sold % - products: 40.5%
Did a company overstate its revenue by around 35 million in the fiscal year ended June 30, 2001?
My guess is that they did overstate revenue. But it was only by 12,738,155
which I got from adding income from continued operations and net account receivable. Revenue would include both cash and credit sales so that is my rationale for how I came up with that answer.
I just wanted to verify whether I did this correctly. Thanks in advance for the assistance.
1 answer