IPA IP 2021 Question 28
A question IPA Japan published in 令和3年度 ITパスポート試験 公開問題 問28, translated into English. ITPEC is based on the same exams.
How much is the ordinary profit in millions of yen that can be calculated from the following income statement data at the end of the current period?
Unit: Million yen
Explanation
985 million yen — ordinary profit comes after cost of sales, SG&A and the non-operating items; the extraordinary loss and the tax come below it.
- •Gross profit: 3,000 − 1,500 = 1,500
- •Operating profit: 1,500 − 500 = 1,000
- •Ordinary profit: 1,000 − 15 = 985 (no non-operating income is given)
The extraordinary loss of 300 and the corporate tax of 300 are deducted only after ordinary profit, on the way to profit before tax and net income, so they do not enter this answer.
Answer (c)
Why not others:
- •(a) 385 — also deducts the extraordinary loss and the corporate tax, 985 − 300 − 300: the net income for the period
- •(b) 685 — also deducts the extraordinary loss, 985 − 300: the profit before tax
- •(d) 1,000 — stops at operating profit, leaving out the non-operating expenses of 15
Key rule: Ordinary profit = operating profit + non-operating income − non-operating expenses; extraordinary items and taxes come after it.
Corporate Activities · AI-written, may contain errors
This question comes from the past questions IPA Japan publishes, translated into English by ITPEC Practice. ITPEC Practice is an independent study tool and is not affiliated with IPA or ITPEC. See the original paper (PDF) or Report an issue.