1. Prepare a case basis income statement.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Accrual Basis Income Statement for the Year Ended December 31, 2012.

 

Net sales $900,000

 

Expenses

 

Cost of goods sold 550,000

 

Selling and administrative expense 133,000

 

Total expenses 683,000

 

Income before income taxes 217,000

 

Income taxes 65,400

 

Net income $151,600

 

 

Other data:

 

a. Cost of goods sold includes depreciation expense of $20.000.

 

b. Selling and administrative expense includes goodwill amortization of 10,000.

 

c. Decrease in deferred income taxes (a liability account), $5,000.

 

d. Increase in accounts receivable, $20,000.

 

e. Increase in accounts payable, $10.000.

 

f. Increase in inventories, $30,000.

 

g. Decrease in income taxes payable, $20.000.

 

 

Required:

 

1. Prepare a case basis income statement.

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