Question

The financial records of Cullumber Inc. were destroyed by fire at the end of 2017. Fortunately, the controller had kept certain statistical data related to the income statement as follows.

1.		The beginning merchandise inventory was $96,900 and decreased 20% during the current year.
2.		Sales discounts amount to $18,700.
3.		30,530 shares of common stock were outstanding for the entire year.
4.		Interest expense was $20,100.
5.		The income tax rate is 30%.
6.		Cost of goods sold amounts to $505,000.
7.		Administrative expenses are 20% of cost of goods sold but only 8% of gross sales.
8.		Four-fifths of the operating expenses relate to sales activities.

From the foregoing information prepare an income statement for the year 2017 in single-step form

Answer 1

Cullumber Inc.
Single step Income statement
For the year 2017
Sales		12,62,500	(101000/8%)
Sales Discount		18,700
Gross Profit		12,43,800
Cost of Goods Sold	5,05,000
Administrative Expenses	1,01,000		(505000*20%)
Selling Expenses	4,04,000		(4/5 of Operating exp. Or Admin Exp. * 4)
Interest Expense	20,100
Total Expenses		10,30,100
Income before taxes		2,13,700
Taxes		64,110	(213700X30%)
Net income		1,49,590