A list of accounts and balances below are ending December 31, 2019, from Wesley's Machining & Welding, Inc. (WMW). Using these account balances, complete a cost of goods sold (COGS) worksheet. Then construct the income statement for the period ending December 31, 2019. Use the balance from the COGS worksheet for COGS on the income statement. Separate operating expenses from the non-operating expenses to sum operating income as EBITD (earnings before interest, taxes, depreciation). Then subtract non-operating expenses and add in non-operating income to determine net income.
Account
Balance
Beginning inventory (January 1, 2019)
$22,000
Depreciation expenses
$12,000
Ending inventory (December 31, 2019)
$16,000
Income tax expenses
$5,700
Insurance expense
$2,500
Interest expenses
$3,000
Interest revenue
$500
Marketing expenses
$7,000
Office supplies expenses
$1,800
Purchase discounts (for inventory)
$2,000
Purchases (inventory)
$100,000
Sales commission expenses (20%)
$50,000
Total revenue for the year ending December 31, 2019
$260,000
Transportation in (inventory)
$4,500
Utilities expense
$13,000
Wages expenses
$52,000
Answer: | ||
COST OF GOODS SOLD Work sheet | ||
Particulars | Amount | |
Inventory at the Beginning | 22000 | |
Add: Purchases (100000-2000) | 98000 | |
(Net puchases=Purchase-discount) | ||
Less: Inventory at the End | 16000 | |
Cost of Goods sold | 104000 | |
Income Statement | ||
Particulars | Amount | |
Total revenue for the year | 260000 | |
Less: Cost of Goods sold | 104000 | |
Gross Profit | 156000 | |
less: Operating Exp | ||
utility exp | 13000 | |
wages exp | 52000 | |
transportation | 4500 | |
sales commission | 50000 | |
marketing exp | 7000 | |
126500 | ||
EBITD | 29500 | |
less; | ||
interest | 3000 | |
Depreciation | 12000 | |
income tax exp | 5700 | |
20700 | ||
Income | 8800 | |
add: Non operating income | 500 | |
Less; | ||
Insurance exp | 2500 | |
office supplies exp | 1800 | |
4300 | ||
Net Income | 5000 | |
Get Answers For Free
Most questions answered within 1 hours.