Question

The following information for ZHOU Co. is for the Month Ended January 31, 2018.

Sales revenue, $370,000, Sales returns and allowances, $20,000, Sales discounts, 8,000, Cost of goods sold, 212,000, Salaries and wages expense, 60,000, Rent expense, 32,000, Insurance expense, 12,000, Freight-out, 7,000, interest expense, 500, investment dividend income, 1500, Income taxes are 40%.

1. Prepare a multiple income statement in good GAAP form

Answer 1

ZHOU Co.
Income Statement (Multi step)
For the Month Ended January 31, 2018
Sales:
Sales revenue	370,000
Less:
Sales returns and allowances	-20,000
Sales discount	-8,000
Net sales		342,000
Cost of goods sold		-212,000
Gross profit		130,000
Operating expenses:
Salaries and wages expense	60,000
Rent expense	32,000
Insurance expense	12,000
Freight-out	7,000
Total operating expenses		-111,000
Income from operations		19,000
Other revenues and gains :
investment dividend income	1,500
Other expenses and losses:
Interest expense	-500
		1,000
Income before income tax		20,000
Income tax expense (20,000 x 40%)		-8,000
Net Income		$12,000