Prepare an income Statement Accounts Payable- 88,851 Accounts receivable- 442,12
ID: 2511347 • Letter: P
Question
Prepare an income Statement
Accounts Payable- 88,851
Accounts receivable- 442,120
Accumulated depreciation: building- 1,265
Accumulated depreciation: equipment- 9,900
Advertising Expense- 9,240
Allowance for doubtful accounts- 75,000
Allowance to Reduce Inventory to NRV- 16,000
Bad Debt Expense- 75,000
Bonds Payable- 700,000
Building- 37,500
Cash- 834,544
Common stock- 135,000
Depreciation Expense- 11,165
Dividends- 28,000
Equipment- 21,600
Impairment Loss Expense- 5,000
Income Taxes Expense- 99,000
Income taxes payable- 99,000
Insurance Expense- 22,500
Interest Expense- 31,171
Interest Payable- 35,000
Inventory- 70,000
Land- 88,000
Notes Payable- 0
Office Expense- 28,500
Paid In Capital- Treasury Stock- 6,000
Patent- 45,000
PIC in Excess of Par- Common Stock- 130,000
Premium on Bonds Payable- 52,045
Prepaid insurance- 4,500
Purchases- 177,000
Rent Revenue- 4,500
Retained earnings- 0
Sales Revenue- 790,000
Treasury Stock- 10,000
Unearned rent revenue- 9,000
Utilities Expense- 33,571
Wages Expense- 66,150
Wages Payable-4,000
Explanation / Answer
Income statement Sales Revenue 790000 less:cost of goods sold [177000Purchase -70000ending inventory ] (107000) Gross margin 683000 operating expense Advertising expense 9240 Bad Debt Expense 75000 Depreciation Expense 11165 Impairment Loss Expense 5000 Insurance Expense 22500 Office Expense 28500 Utilities Expense 33571 Wages Expense 66150 loss on reduction of inventory to NRV 16000 Total operating expense (267126) operating income 415874 Other income /(expense) Rent revenue 4500 Interest expense (31171) (26671) Income before tax 389203 less:Income tax expense (99000) Net Income 290203