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The following adjusted balances were taken from the ledger of EBC Trading on December 31, 2016,...

The following adjusted balances were taken from the ledger of EBC Trading on December 31, 2016, Cash 350,000. Accounts Receivble 33,950. Interest Receivable 1,500. Merchandise, January 1 , 50,000, Supplies 2,650. prepaid rent 40,000. equipment 75,000. Accumulated depreciation 25,000. Accounts payable 15,000. Notes Payable 10,000. interest payable 1,000. E. Capital 50,000. E Drawing 10,000. B Capital 75,000. B Drawing 15,000. C Capital 100,000. Sales 980,650. Sales Discount 5,500. Sales returns 3,500. Purchases455,000. Purchase returns 7,500.Purchase discount 3,300. Sales Salary Expenses 97,000. Supplies Expense 16,600.Rent expense 80,000. Utilities expense 24,000. Insurance expense 8,250.interest expense 1,000. interest income 1,500. Total 1,268,950. Prepare the Income Statement in good form. For the year ended December 31, 2016

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Answer #1

Income statement of EBC trading for the year ended December 31, 2016

Particulars Amount Amount
Total revenue
(1) Income from operations
a. Gross sales 980,650
b. Sales discount 5,500
c. Sales returns 3,500
Net sales (A - b - c) 971,650
(2) Income from other than operations 1,500
Total revenue (1 + 2) 973,150
Less: Cost of goods sold
a. Purchases 455,000
b. Purchases returns 7,500
c. Purchase discounts 3,300
Cost of goods sold (a - b - c) (444,200)
Gross profit = (1 - 2) 528,950
Less: Operting , selling and Administrative expenses
Sales Salary Expenses 97,100
Supplies Expense 16,600
Rent expense 80,000
Utilities expense 24,000
Insurance expense 8,250
interest expense 1,000
Total Expenses (226,950)
Net profit/(loss) (Gross profit - Total expenses) 302,000

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