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
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