Preparing the Income Statement for a company with following information: Accumul
ID: 2794971 • Letter: P
Question
Preparing the Income Statement for a company with following information:
Accumulated Depreciation 30,800
Buildings 110,000
Cash 4,400
Depreciation Expense 11,000
Common Stock 57,200
Purchases, Net 303,600
Inventory, Beginning of year 19,800
Total Stockholder’s Equity 77,000
Net Other income (Expense) (2,200)
Beginning Balance, Retained Earnings 11,000
Dividends 4,400
Accounts Payable 13,200
Corporate Income Tax Expense 4,400
Accounts Receivable 6,600
Telephone Expense 15,400
Costs of Goods Sold 308,000
Machinery and Equipment 26,400
Ending Balance, Retained Earnings 19,800
Mortgage payable 41,800
Revenue 440,000
Wages Expenses 63,800
Advertising Expense 22,000
Inventory, End of Year 15,400
1)Some totals are given and that should help you make sure that you have placed items in the correct place and calculated correctly.
2)Gross profit should compute to 30%.
Income statement.xlsx: https://drive.google.com/file/d/14GYhTk6NYWD5YYAHnRHWhgFvI_K7BHxe/view?usp=sharing
Explanation / Answer
Net sales 4,40,000 cost of goods sold (3,08,000) Gross margin 1,32,000 Operating expneses: Selling expenses Wages (63,800) Advertising (22,000) Phone and fax (15,400) Depreciation expense (11,000) Total operating expenses (1,12,200) Income from operations 19,800.00 Net other expense (2,200) (2,200) Net income before tax 17,600.00 Corporate tax expense -4400 Net income 13,200.00