Prepare a single-step income statement in the format shown in Exhibit 8. Prepare

Question

Prepare a single-step income statement in the format shown in Exhibit 8.

Prepare a statement of stockholders' equity. No common stock was issued during the year.

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PRESCOTT INC. Income Statement For the Year Ended September 30, 20Y8 Revenues: Sales $ 7,134,000 Expenses: Cost of goods sold $   4,350,000 Selling expenses    Administrative expenses Interest expenses           24,000 Total expenses    Net income    PRESCOTT INC. Retained Earnings Statement    Common Stock Ret. Earnings Total Balances, October 1, 20Y7    Net income    Dividends    Balances, September 30, 20Y8   

Explanation / Answer

Income Statement: Revenue: Sales 7134000 Less: Expenses Cost of goods sold 4350000 Sales salaries expenses 777600 Advertisement expenses 91800 Depreciation-Store equipmenet 16600 Misc. selling expense 4000 office salaries expenses 154800 Rent expenses 79800 Insurance expense 45900 Depreciation expenses-Equipment 32400 office supplies expenses 3300 Misc admin expenses 3800 Interest expense 24000 Total expenses 5584000 Net income 1550000 Retained earnings Statement Common Ret. Earnings Total Stock Balance Oct 1 30000 507600 537600 Net income 1550000 1550000 Dividend -250000 -250000 balance Sep 30 2008 30000 1807600 1837600

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