The following account balances were included in the trial balance of Sarasota Co
ID: 2338285 • Letter: T
Question
The following account balances were included in the trial balance of Sarasota Corporation at June 30, 2017. Sales revenue $ 1,579,860 Depreciation expense (office furniture and equipment) $ 6,762 Sales discounts 31,690 Property tax expense 6,843 Cost of goods sold 897,100 Bad debt expense (selling) 4,503 Salaries and wages expense (sales) 56,690 Maintenance and repairs expense (administration) 8,281 Sales commissions 98,950 Office expense 5,980 Travel expense (salespersons) 31,900 Sales returns and allowances 63,694 Delivery expense 23,150 Dividends received 39,910 Entertainment expense 15,110 Interest expense 16,440 Telephone and Internet expense (sales) 9,080 Income tax expense 98,290 Depreciation expense (sales equipment) 5,069 Depreciation understatement due to error—2014 (net of tax) 17,004 Maintenance and repairs expense (sales) 6,440 Dividends declared on preferred stock 9,210 Miscellaneous selling expenses 5,045 Dividends declared on common stock 38,360 Office supplies used 3,368 Telephone and Internet expense (administration) 3,097 The Retained Earnings account had a balance of $ 364,510 at July 1, 2016. There are 83,970 shares of common stock outstanding. Using the multiple-step form, prepare an income statement for the year ended June 30, 2017. (Round earnings per share to 2 decimal places, e.g. 1.48.) SARASOTA CORPORATION Income Statement $ : List of Accounts Prepare a retained earnings statement for the year ended June 30, 2017. (List items that increase adjusted retained earnings first.) SARASOTA CORPORATION Retained Earnings Statement $ : List of Accounts Using the single-step form, prepare an income statement for the year ended June 30, 2017. (Round earnings per share to 2 decimal places, e.g. 1.48.) SARASOTA CORPORATION Income Statement $ $ $ eTextbook and Media List of Accounts Prepare a retained earnings statement for the year ended June 30, 2017. (List items that increase adjusted retained earnings first.) SARASOTA CORPORATION Retained Earnings Statement $ :
Explanation / Answer
* Prepare an income statement for the year ended June 30, 2017.
(a) Sarasota Corporation
Income Statement
For the Year Ended June 30, 2017
Sales Revenue
Sales revenue
$ 1,579,860
Less: Sales discounts
$31,690
Sales returns and allowances
63,694
95,384
Net sales
1,484,476
Less: Cost of goods sold
897,100
Gross profit
587,376
Less: Operating Expenses
Selling expenses
Sales commissions
$98,950
Salaries and wages exp.
56,690
Travel expense
31,900
Freight-out
23,150
Entertainment expense
15,110
Telephone and Internet expense
9,080
Maintenance and repairs expense
6,440
Depreciation expense
5,069
Bad debt expense
4,503
Misc. selling expenses
5,045
255,937
Less: Administrative Expenses
Maintenance and repairs expense
8,281
Property tax expense
6,843
Depreciation expense
6,762
Supplies expense
3,368
Telephone and internet expense
3,097
Miscellaneous office expenses
5,980
34,331
Income from operations
297,108
Add: Other Revenues and Gains
Dividend revenue
39,910
Less: Other Expenses and Losses
Interest expense
16,440
Income before income tax
320,578
Less: Income tax
98,290
Net income
$222,288
Earnings per common share
[($222,288 – $9,210) ÷ 83,970]
$2.53
* List items that increase adjusted retained earnings first.
Net Income - $ 222,288
* Using the single-step form, prepare an income statement for the year ended June 30, 2017.
Sarasota Corporation
Income Statement
For the Year Ended June 30, 2017
Revenues
Net sales
$1,484,476
Dividend revenue
39,910
Total revenues
1,524,386
Expenses
Cost of goods sold
897,100
Selling expenses
255,937
Administrative expenses
34,331
Interest expense
16,440
Total expenses
1,203,808
Income before income tax
320,578
Income tax
98,290
Net income
$ 222,288
Earnings per common share
$2.53
Thank You.
(a) Sarasota Corporation
Income Statement
For the Year Ended June 30, 2017
Sales Revenue
Sales revenue
$ 1,579,860
Less: Sales discounts
$31,690
Sales returns and allowances
63,694
95,384
Net sales
1,484,476
Less: Cost of goods sold
897,100
Gross profit
587,376
Less: Operating Expenses
Selling expenses
Sales commissions
$98,950
Salaries and wages exp.
56,690
Travel expense
31,900
Freight-out
23,150
Entertainment expense
15,110
Telephone and Internet expense
9,080
Maintenance and repairs expense
6,440
Depreciation expense
5,069
Bad debt expense
4,503
Misc. selling expenses
5,045
255,937
Less: Administrative Expenses
Maintenance and repairs expense
8,281
Property tax expense
6,843
Depreciation expense
6,762
Supplies expense
3,368
Telephone and internet expense
3,097
Miscellaneous office expenses
5,980
34,331
Income from operations
297,108