Sales Revenue $5,000 Inventory, January 1, 2015 $1,600 Purchases $1,200 Interest Revenue $250 Loss on disposal of a discontinued component of the business (pre-tax) $400 Inventory, December 31, 2015 $750 Income Tax Expense $660 Sheri’s Designs has 2,0
Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
Below are selected accounts taken from the adjusted
Operating Expense $1,000
Sales Revenue $5,000
Inventory, January 1, 2015 $1,600
Purchases $1,200
Interest Revenue $250
Loss on disposal of a discontinued component of the business (pre-tax) $400
Inventory, December 31, 2015 $750
Income Tax Expense $660
Sheri’s Designs has 2,000 share of common stock outstanding and net income per share for
2015 was $0.63. The income tax rate is 30%.
Required:
a. Prepare a single-step income statement
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
