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Category > Accounting Posted 21 Apr 2017 My Price 10.00

SIMON COMPANY Income Statement

Please help me with my Accounting assignment.

Scenario: An inexperienced accountant prepared this condensed income statement for Simon Company, a retail firm that has been in business for a number of years.

 

SIMON COMPANY

Income Statement

For the Year Ended December 31, 2017

 

Revenues

 

Net sales

$850,000

Other revenues

22,000

 

872,000

Cost of goods sold

555,000

Gross profit

317,000

Operating expenses

 

Selling expenses

109,000

Administrative expenses

103,000

 

212,000

Net earnings

$105,000

As an experienced, knowledgeable accountant, you review the statement and determine the following facts:

  1. Net sales consist of: sales $911,000, less freight-out on merchandise sold $33,000, and sales returns and allowances $28,000.
  2. Other revenues consist of sales discounts $18,000 and rent revenue $4,000.
  3. Selling expenses consist of salespersons' salaries $80,000, depreciation on equipment $10,000, advertising $13,000, and sales commissions $6,000. The commissions represent commissions paid. At December 21, $3,000 of commissions have been earned by salespersons but have not been paid. All compensation should be recorded as Salaries and Wages Expense.
  4. Administrative expenses consist of office salaries $47,000, dividends $18,000, utilities $12,000, interest expense $2,000, and rent expense $24,000, which includes prepayments totaling $6,000 for the first quarter of 2018. 

Prepare a detailed multi-step income statement with a brief explanation of 700 words. Assume a 25% tax rate. 

Show your work on the Excel® spreadsheet and submit with your explanation.

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Answers

SuperTutor
(15)
Status NEW Posted 21 Apr 2017 02:04 AM My Price 10.00

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file 1492741683-Solutions file.docx preview (56 words )
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