The table is an excerpt from an income statement at the end of a year for Company A. When the net income for the year is 800 million yen, how much are the selling, general, and administrative expenses in millions of yen? Unit: Million yen | Net sales | 8,000 Cost of goods sold | 6,000 Selling, general, and administrative expenses | [ ] Non-operating income | 150 Non-operating expenses | 50 Extraordinary income | 60 Extraordinary loss | 10 Income taxes | 350

ITPEC IP April 2026 Question 72

The table is an excerpt from an income statement at the end of a year for Company A. When the net income for the year is 800 million yen, how much are the selling, general, and administrative expenses in millions of yen?

Unit: Million yen

Net sales	8,000
Cost of goods sold	6,000
Selling, general, and administrative expenses	blank
Non-operating income	150
Non-operating expenses	50
Extraordinary income	60
Extraordinary loss	10
Income taxes	350

a)850b)900c)1,000d)1,200

Explanation

1,000 million yen — work down the income statement from net sales to net income, then solve for the missing expense S.

Step	Amount (million yen)
Gross profit: net sales − cost of goods sold	8000 − 6000 = 2000
Operating income: − SG&A expenses	2000 − S
Ordinary income: + non-operating income − non-operating expenses	2000 − S + 150 − 50 = 2100 − S
Income before taxes: + extraordinary income − extraordinary loss	2100 − S + 60 − 10 = 2150 − S
Net income: − income taxes	2150 − S − 350 = 1800 − S

Net income is 800, so 1800 − S = 800 and S = 1000.

Answer (c)

Why not others:

•(a) 850 — subtracts only the income taxes and leaves out the non-operating and extraordinary items: 2000 − 350 − 800 = 850
•(b) 900 — leaves out the non-operating items (net +100) but keeps the rest: 2000 + 50 − 350 − 800 = 900
•(d) 1,200 — treats the net income as if it were operating income, 2000 − 800, ignoring everything below it

Key rule: Gross profit − SG&A = operating income; ± non-operating items = ordinary income; ± extraordinary items = income before taxes; − taxes = net income.

Corporate Activities · AI-written, may contain errors

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