Question

An inexperienced accountant prepared this condensed income statement for Simon Company, a retail firm that has...

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, 2022
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 that the following steps were taken by the accountant to compute the amounts presented in the income statement.

1. Net sales, as presented, consist of sales $911,000, less freight-out on merchandise sold $33,000, and sales returns and allowances $28,000.
2. Other revenues, as presented, consist of sales discounts $18,000 and rent revenue $4,000.
3. Selling expenses, as presented, 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 31, $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, as presented, 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 correct detailed multiple-step income statement. Assume a 25% tax rate. (List other revenues before other expenses. Round answers to 0 decimal places, e.g. 5,125.)

SIMON COMPANY
Income Statement
choose the accounting period
select an opening name for section one
enter an income statement item
$enter a dollar amount
select between addition and deduction
:
enter an income statement item
$enter a dollar amount
enter an income statement item
enter a dollar amount
enter a subtotal of the two previous amounts
select a closing name for section one
enter a total amount for section one
enter an income statement item
enter a dollar amount
select a summarizing line for the first part
enter a total amount for the first part
select an opening name for section two
enter an income statement item
enter a dollar amount
enter an income statement item
enter a dollar amount
enter an income statement item
enter a dollar amount
enter an income statement item
enter a dollar amount
enter an income statement item
enter a dollar amount
enter an income statement item
enter a dollar amount
select a closing name for section two
enter a total amount for section two
select a summarizing line for the second part
enter a total amount for the second part
select an opening name for section three
enter an income statement item
enter a dollar amount
select an opening name for section four
enter an income statement item
enter a dollar amount
select a summarizing line for the third part
enter a total amount for all three parts
enter an income statement item
enter a dollar amount
select a closing name for this statement
$enter a total net income or loss amount
eTextbook and Media
List of Accounts

Homework Answers

Answer #1
Simon Company
Income Statement
For the year ended December 31, 2022
Sales $ 911,000
Less: Sales Returns and Allowances 28,000
Less: Sales Discounts 18,000
Net Sales $ 865,000
Cost of Goods Sold 555,000
Gross Profit 310,000
Selling and Administrative Expenses
Selling Expenses
Advertising $ 13,000
Freight-out 33,000
Salaries and Wages Expense 89,000
Depreciation Expense 10,000
Total Selling Expenses 145,000
Administrative Expenses
Salaries and Wages Expense 47,000
Rent Expense 18,000
Utilities Expense 12,000
Total Administrative Expenses 77,000
Total Selling and Administrative Expenses 222,000
Income from Operations 88,000
Other Income / ( Expenses)
Rent Revenue 4,000
Interest Expense (2,000) 2,000
Income before Taxes 90,000
Income Tax Expense @ 25 % 22,500
Net Income $ 67,500
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
The following information is available for Whispering Winds Corp. for the year ended December 31, 2017:...
The following information is available for Whispering Winds Corp. for the year ended December 31, 2017: Other revenues and gains $9,500 Sales revenue $682,900 Other expenses and losses 15,200 Operating expenses 238,800 Cost of goods sold 205,400 Sales returns and allowances 40,000 Other comprehensive income 5,700 Prepare a multiple-step income statement for Whispering Winds Corp and comprehensive income statement. The company has a tax rate of 30%. This rate also applies to the other comprehensive income. WHISPERING WINDS CORP. Income...
Presented below is information for Pharoah Company for the month of January 2022. Cost of goods...
Presented below is information for Pharoah Company for the month of January 2022. Cost of goods sold $218,125 Rent expense $33,000 Freight-out 7,000 Sales discounts 8,000 Insurance expense 12,000 Sales returns and allowances 20,000 Salaries and wages expense 57,000 Sales revenue 377,000 Other comprehensive income 2,100 (a) Prepare a multiple-step income statement. (If there is a net loss then enter the amount using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Pharoah Company Income Statement...
Carla Vista Company bottles and distributes B-Lite, a diet soft drink. The beverage is sold for...
Carla Vista Company bottles and distributes B-Lite, a diet soft drink. The beverage is sold for 60 cents per 16-ounce bottle to retailers, who charge customers 75 cents per bottle. For the year 2020, management estimates the following revenues and costs. Sales $1,980,000 Selling expenses—variable $110,000 Direct materials 430,000 Selling expenses—fixed 62,000 Direct labor 400,000 Administrative expenses—variable 26,000 Manufacturing overhead—variable 420,000 Administrative expenses—fixed 133,200 Manufacturing overhead—fixed 280,000 (a) Prepare a CVP income statement for 2020 based on management’s estimates. CARLA...
Problem 22-03A (Part Level Submission) Blossom Company bottles and distributes B-Lite, a diet soft drink. The...
Problem 22-03A (Part Level Submission) Blossom Company bottles and distributes B-Lite, a diet soft drink. The beverage is sold for 50 cents per 16-ounce bottle to retailers, who charge customers 75 cents per bottle. For the year 2020, management estimates the following revenues and costs. Sales $1,950,000 Selling expenses—variable $67,000 Direct materials 550,000 Selling expenses—fixed 61,000 Direct labor 350,000 Administrative expenses—variable 28,000 Manufacturing overhead—variable 370,000 Administrative expenses—fixed 59,250 Manufacturing overhead—fixed 260,000 (a) Prepare a CVP income statement for 2020 based...
Deleon Inc. is preparing its annual budgets for the year ending December 31, 2020. Accounting assistants...
Deleon Inc. is preparing its annual budgets for the year ending December 31, 2020. Accounting assistants furnish the data shown below. Product JB 50 Product JB 60 Sales budget:     Anticipated volume in units 404,400 202,600     Unit selling price $23 $28 Production budget:     Desired ending finished goods units 27,300 19,000     Beginning finished goods units 34,700 13,000 Direct materials budget:     Direct materials per unit (pounds) 2 2     Desired ending direct materials pounds 34,200 19,400     Beginning direct materials pounds 44,400 12,000     Cost per...
You are provided with the following information taken from Skysong, Inc.’s March 31, 2017, balance sheet....
You are provided with the following information taken from Skysong, Inc.’s March 31, 2017, balance sheet. Cash $ 11,520 Accounts receivable 22,360 Inventory 36,190 Property, plant, and equipment, net of depreciation 120,200 Accounts payable 22,980 Common stock 151,200 Retained earnings 11,790 Additional information concerning Skysong, Inc. is as follows. 1. Gross profit is 25% of sales. 2. Actual and budgeted sales data: March (actual) $ 47,600 April (budgeted) 71,100 3. Sales are both cash and credit. Cash collections expected in...
PLEASE ANSWER RIGHT NOW!!! Shamrock Inc. has recorded all necessary adjusting entries, except for income tax...
PLEASE ANSWER RIGHT NOW!!! Shamrock Inc. has recorded all necessary adjusting entries, except for income tax expense, at its fiscal year end, July 31, 2021. The following information has been taken from the adjusted trial balance: Accounts payable $26,000 Interest expense $4,000 Cash dividends—common 62,000 Notes payable 106,000 Common shares 200,000 Retained earnings (Aug. 1, 2020) 340,000 Cost of goods sold 316,500 Salaries expense 122,000 Dividends payable 14,400 Sales 667,000 Income tax expense 35,000 Supplies expense 10,500 Income tax payable...
These financial statement items are for Crane Corporation at year end, July 31, 2018: Operating expenses...
These financial statement items are for Crane Corporation at year end, July 31, 2018: Operating expenses $32,500 Interest payable $ 1,900 Salaries expense 47,700 Supplies expense 1,200 Unearned revenue 12,000 Dividends declared 15,500 Utilities expense 2,500 Depreciation expense 4,000 Equipment 61,400 Retained earnings, Aug. 1, 2017 20,940 Accounts payable 4,020 Rent expense 13,500 Service revenue 113,600 Income tax expense 5,200 Rent revenue 19,500 Supplies 1,200 Common shares 26,000 Held for trading investments 23,500 Cash 5,260 Bank loan payable (due Dec....
You are provided with the following information taken from Teal Mountain Inc.’s March 31, 2022, balance...
You are provided with the following information taken from Teal Mountain Inc.’s March 31, 2022, balance sheet. Cash $12,060 Accounts receivable 20,670 Inventory 36,800 Property, plant, and equipment, net of depreciation 122,800 Accounts payable 23,330 Common stock 152,400 Retained earnings 12,520 Additional information concerning Teal Mountain Inc. is as follows. 1. Gross profit is 27% of sales. 2. Actual and budgeted sales data: March (actual) $46,500 April (budgeted) 73,300 3. Sales are both cash and credit. Cash collections expected in...
North Company has completed all of its operating budgets. The sales budget for the year shows...
North Company has completed all of its operating budgets. The sales budget for the year shows 50,320 units and total sales of $2,107,000. The total unit cost of making one unit of sales is $23. Selling and administrative expenses are expected to be $302,700. Interest is estimated to be $13,160. Income taxes are estimated to be $200,100. Prepare a budgeted multiple-step income statement for the year ending December 31, 2020. NORTH COMPANY Budgeted Income Statement choose the accounting period     ...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT