Income statement: An income statement can be defined as the statement explaining the company’s financial performance over a specific accounting period. The income or revenues are recorded on the income statement along with the expenses incurred for the period. To prepare: Income statement for Delray Mfg. (a manufacturer)

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Answer 1

Question

Chapter 18, Problem 14E

To determine

Concept Introduction:

Income statement: An income statement can be defined as the statement explaining the company’s financial performance over a specific accounting period. The income or revenues are recorded on the income statement along with the expenses incurred for the period.

To prepare:

Income statement for Delray Mfg. (a manufacturer)

Expert Solution & Answer

Answer to Problem 14E

Solution:

*Delray Mfg.*
*Income statement*
*For the year Ended December 31, 2017*
Sales		$ 1,250,000
Less: Cost of goods sold
Cost of good manufactured	$ 534,390
Add: Finished Goods Inventory - Beginning	$ 62,750
Less: Finished Goods Inventory - Ending	$ 67,300
Cost of Goods sold		$ 529,840
Gross profit		$ 720,160
Less: Selling and administrative expenses
Advertising expense	$ 94,000
General and administrative expense	$ 129,300
Total selling and administrative expense		$ 223,300

Net Operating Income		$ 496,860

Explanation of Solution

The income statement is prepared as under –

Given,

• Sales = $ 1,250,000

• Cost of Goods manufactured = $ 534,390

• Finished Goods Inventory – Beginning = $ 62,750

• Finished Goods Inventory – Ending = $ 67,300

• Advertising expense = $ 94,000

• General and administrative expense = $ 129,300

First,

a. The cost of goods sold is calculated. It is calculated as under –

$\begin{array}{l} C o s t o f G o o d s s o l d = \\ C o s t o f G o o d s m a n u f a c t u r e d \\ + F i n i s h e d G o o d s I n v e n t o r y B e g i n n i n g \\ - F i n i s h e d G o o d s I n v e n t o r y E n d i n g \end{array}$

$\begin{array}{l} C o s t o f G o o d s s o l d = $ 534, 390 + $ 62, 750 - $ 67, 300 \\ C o s t o f G o o d s s o l d = $ 529, 840 \end{array}$

b. Gross profit is calculated as under –

$\begin{array}{l} G r o s s p r o f i t = S a l e s - C o s t o f G o o d s s o l d \\ G r o s s p r o f i t = $ 1, 250, 000 - $ 529, 840 \\ G r o s s p r o f i t = $ 720, 160 \end{array}$

c. Total selling and administrative expenses are calculated as under –

$\begin{array}{l} T o t a l s e l l i n g a n d a d m i n i s t r a t i v e e x p e n s e s = \\ A d v e r t i s i n g e x p e n s e \\ + G e n e r a l a n d a d m i n i s t r a t i v e e x p e n s e \end{array}$

$\begin{array}{l} T o t a l s e l l i n g a n d a d m i n i s t r a t i v e e x p e n s e s = $ 94, 000 + $ 129, 300 \\ T o t a l s e l l i n g a n d a d m i n i s t r a t i v e e x p e n s e s = $ 223, 300 \end{array}$

d. Net operating Income is calculated as under –

$\begin{array}{l} N e t o p e r a t i n g i n c o m e = G r o s s p r o f i t - T o t a l s e l l i n g a n d a d m i n i s t r a t i v e e x p e n s e s \\ N e t o p e r a t i n g i n c o m e = $ 720, 160 - $ 223, 300 \\ N e t o p e r a t i n g i n c o m e = $ 496, 860 \end{array}$

The income statement for Delray Mfg. has been prepared. The net income for the year ending December 31, 2017 is $ 496,860.

Conclusion

Thus, the income statement for Delray Mfg. for the year ending December 31, 2017 has been prepared.

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Answer 2

Question

Chapter 18, Problem 14E

To determine

Concept Introduction:

Income statement: An income statement can be defined as the statement explaining the company’s financial performance over a specific accounting period. The income or revenues are recorded on the income statement along with the expenses incurred for the period.

To prepare:

Income statement for Delray Mfg. (a manufacturer)

Expert Solution & Answer

Answer to Problem 14E

Solution:

*Delray Mfg.*
*Income statement*
*For the year Ended December 31, 2017*
Sales		$ 1,250,000
Less: Cost of goods sold
Cost of good manufactured	$ 534,390
Add: Finished Goods Inventory - Beginning	$ 62,750
Less: Finished Goods Inventory - Ending	$ 67,300
Cost of Goods sold		$ 529,840
Gross profit		$ 720,160
Less: Selling and administrative expenses
Advertising expense	$ 94,000
General and administrative expense	$ 129,300
Total selling and administrative expense		$ 223,300

Net Operating Income		$ 496,860

Explanation of Solution

The income statement is prepared as under –

Given,

• Sales = $ 1,250,000

• Cost of Goods manufactured = $ 534,390

• Finished Goods Inventory – Beginning = $ 62,750

• Finished Goods Inventory – Ending = $ 67,300

• Advertising expense = $ 94,000

• General and administrative expense = $ 129,300

First,

a. The cost of goods sold is calculated. It is calculated as under –

$\begin{array}{l} C o s t o f G o o d s s o l d = \\ C o s t o f G o o d s m a n u f a c t u r e d \\ + F i n i s h e d G o o d s I n v e n t o r y B e g i n n i n g \\ - F i n i s h e d G o o d s I n v e n t o r y E n d i n g \end{array}$

$\begin{array}{l} C o s t o f G o o d s s o l d = $ 534, 390 + $ 62, 750 - $ 67, 300 \\ C o s t o f G o o d s s o l d = $ 529, 840 \end{array}$

b. Gross profit is calculated as under –

$\begin{array}{l} G r o s s p r o f i t = S a l e s - C o s t o f G o o d s s o l d \\ G r o s s p r o f i t = $ 1, 250, 000 - $ 529, 840 \\ G r o s s p r o f i t = $ 720, 160 \end{array}$

c. Total selling and administrative expenses are calculated as under –

$\begin{array}{l} T o t a l s e l l i n g a n d a d m i n i s t r a t i v e e x p e n s e s = \\ A d v e r t i s i n g e x p e n s e \\ + G e n e r a l a n d a d m i n i s t r a t i v e e x p e n s e \end{array}$

$\begin{array}{l} T o t a l s e l l i n g a n d a d m i n i s t r a t i v e e x p e n s e s = $ 94, 000 + $ 129, 300 \\ T o t a l s e l l i n g a n d a d m i n i s t r a t i v e e x p e n s e s = $ 223, 300 \end{array}$

d. Net operating Income is calculated as under –

$\begin{array}{l} N e t o p e r a t i n g i n c o m e = G r o s s p r o f i t - T o t a l s e l l i n g a n d a d m i n i s t r a t i v e e x p e n s e s \\ N e t o p e r a t i n g i n c o m e = $ 720, 160 - $ 223, 300 \\ N e t o p e r a t i n g i n c o m e = $ 496, 860 \end{array}$

The income statement for Delray Mfg. has been prepared. The net income for the year ending December 31, 2017 is $ 496,860.

Conclusion

Thus, the income statement for Delray Mfg. for the year ending December 31, 2017 has been prepared.

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Answer 3

Question

Chapter 18, Problem 14E

To determine

Concept Introduction:

Income statement: An income statement can be defined as the statement explaining the company’s financial performance over a specific accounting period. The income or revenues are recorded on the income statement along with the expenses incurred for the period.

To prepare:

Income statement for Delray Mfg. (a manufacturer)

Expert Solution & Answer

Answer to Problem 14E

Solution:

*Delray Mfg.*
*Income statement*
*For the year Ended December 31, 2017*
Sales		$ 1,250,000
Less: Cost of goods sold
Cost of good manufactured	$ 534,390
Add: Finished Goods Inventory - Beginning	$ 62,750
Less: Finished Goods Inventory - Ending	$ 67,300
Cost of Goods sold		$ 529,840
Gross profit		$ 720,160
Less: Selling and administrative expenses
Advertising expense	$ 94,000
General and administrative expense	$ 129,300
Total selling and administrative expense		$ 223,300

Net Operating Income		$ 496,860

Explanation of Solution

The income statement is prepared as under –

Given,

• Sales = $ 1,250,000

• Cost of Goods manufactured = $ 534,390

• Finished Goods Inventory – Beginning = $ 62,750

• Finished Goods Inventory – Ending = $ 67,300

• Advertising expense = $ 94,000

• General and administrative expense = $ 129,300

First,

a. The cost of goods sold is calculated. It is calculated as under –

$\begin{array}{l} C o s t o f G o o d s s o l d = \\ C o s t o f G o o d s m a n u f a c t u r e d \\ + F i n i s h e d G o o d s I n v e n t o r y B e g i n n i n g \\ - F i n i s h e d G o o d s I n v e n t o r y E n d i n g \end{array}$

$\begin{array}{l} C o s t o f G o o d s s o l d = $ 534, 390 + $ 62, 750 - $ 67, 300 \\ C o s t o f G o o d s s o l d = $ 529, 840 \end{array}$

b. Gross profit is calculated as under –

$\begin{array}{l} G r o s s p r o f i t = S a l e s - C o s t o f G o o d s s o l d \\ G r o s s p r o f i t = $ 1, 250, 000 - $ 529, 840 \\ G r o s s p r o f i t = $ 720, 160 \end{array}$

c. Total selling and administrative expenses are calculated as under –

$\begin{array}{l} T o t a l s e l l i n g a n d a d m i n i s t r a t i v e e x p e n s e s = \\ A d v e r t i s i n g e x p e n s e \\ + G e n e r a l a n d a d m i n i s t r a t i v e e x p e n s e \end{array}$

$\begin{array}{l} T o t a l s e l l i n g a n d a d m i n i s t r a t i v e e x p e n s e s = $ 94, 000 + $ 129, 300 \\ T o t a l s e l l i n g a n d a d m i n i s t r a t i v e e x p e n s e s = $ 223, 300 \end{array}$

d. Net operating Income is calculated as under –

$\begin{array}{l} N e t o p e r a t i n g i n c o m e = G r o s s p r o f i t - T o t a l s e l l i n g a n d a d m i n i s t r a t i v e e x p e n s e s \\ N e t o p e r a t i n g i n c o m e = $ 720, 160 - $ 223, 300 \\ N e t o p e r a t i n g i n c o m e = $ 496, 860 \end{array}$

The income statement for Delray Mfg. has been prepared. The net income for the year ending December 31, 2017 is $ 496,860.

Conclusion

Thus, the income statement for Delray Mfg. for the year ending December 31, 2017 has been prepared.

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Answer 4

Question

Chapter 18, Problem 14E

To determine

Concept Introduction:

Income statement: An income statement can be defined as the statement explaining the company’s financial performance over a specific accounting period. The income or revenues are recorded on the income statement along with the expenses incurred for the period.

To prepare:

Income statement for Delray Mfg. (a manufacturer)

Expert Solution & Answer

Answer to Problem 14E

Solution:

*Delray Mfg.*
*Income statement*
*For the year Ended December 31, 2017*
Sales		$ 1,250,000
Less: Cost of goods sold
Cost of good manufactured	$ 534,390
Add: Finished Goods Inventory - Beginning	$ 62,750
Less: Finished Goods Inventory - Ending	$ 67,300
Cost of Goods sold		$ 529,840
Gross profit		$ 720,160
Less: Selling and administrative expenses
Advertising expense	$ 94,000
General and administrative expense	$ 129,300
Total selling and administrative expense		$ 223,300

Net Operating Income		$ 496,860

Explanation of Solution

The income statement is prepared as under –

Given,

• Sales = $ 1,250,000

• Cost of Goods manufactured = $ 534,390

• Finished Goods Inventory – Beginning = $ 62,750

• Finished Goods Inventory – Ending = $ 67,300

• Advertising expense = $ 94,000

• General and administrative expense = $ 129,300

First,

a. The cost of goods sold is calculated. It is calculated as under –

$\begin{array}{l} C o s t o f G o o d s s o l d = \\ C o s t o f G o o d s m a n u f a c t u r e d \\ + F i n i s h e d G o o d s I n v e n t o r y B e g i n n i n g \\ - F i n i s h e d G o o d s I n v e n t o r y E n d i n g \end{array}$

$\begin{array}{l} C o s t o f G o o d s s o l d = $ 534, 390 + $ 62, 750 - $ 67, 300 \\ C o s t o f G o o d s s o l d = $ 529, 840 \end{array}$

b. Gross profit is calculated as under –

$\begin{array}{l} G r o s s p r o f i t = S a l e s - C o s t o f G o o d s s o l d \\ G r o s s p r o f i t = $ 1, 250, 000 - $ 529, 840 \\ G r o s s p r o f i t = $ 720, 160 \end{array}$

c. Total selling and administrative expenses are calculated as under –

$\begin{array}{l} T o t a l s e l l i n g a n d a d m i n i s t r a t i v e e x p e n s e s = \\ A d v e r t i s i n g e x p e n s e \\ + G e n e r a l a n d a d m i n i s t r a t i v e e x p e n s e \end{array}$

$\begin{array}{l} T o t a l s e l l i n g a n d a d m i n i s t r a t i v e e x p e n s e s = $ 94, 000 + $ 129, 300 \\ T o t a l s e l l i n g a n d a d m i n i s t r a t i v e e x p e n s e s = $ 223, 300 \end{array}$

d. Net operating Income is calculated as under –

$\begin{array}{l} N e t o p e r a t i n g i n c o m e = G r o s s p r o f i t - T o t a l s e l l i n g a n d a d m i n i s t r a t i v e e x p e n s e s \\ N e t o p e r a t i n g i n c o m e = $ 720, 160 - $ 223, 300 \\ N e t o p e r a t i n g i n c o m e = $ 496, 860 \end{array}$

The income statement for Delray Mfg. has been prepared. The net income for the year ending December 31, 2017 is $ 496,860.

Conclusion

Thus, the income statement for Delray Mfg. for the year ending December 31, 2017 has been prepared.

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Answer 5

Chapter 18, Problem 14E

To determine

Concept Introduction:

Income statement: An income statement can be defined as the statement explaining the company’s financial performance over a specific accounting period. The income or revenues are recorded on the income statement along with the expenses incurred for the period.

To prepare:

Income statement for Delray Mfg. (a manufacturer)

Expert Solution & Answer

Answer to Problem 14E

Solution:

*Delray Mfg.*
*Income statement*
*For the year Ended December 31, 2017*
Sales		$ 1,250,000
Less: Cost of goods sold
Cost of good manufactured	$ 534,390
Add: Finished Goods Inventory - Beginning	$ 62,750
Less: Finished Goods Inventory - Ending	$ 67,300
Cost of Goods sold		$ 529,840
Gross profit		$ 720,160
Less: Selling and administrative expenses
Advertising expense	$ 94,000
General and administrative expense	$ 129,300
Total selling and administrative expense		$ 223,300

Net Operating Income		$ 496,860

Explanation of Solution

The income statement is prepared as under –

Given,

• Sales = $ 1,250,000

• Cost of Goods manufactured = $ 534,390

• Finished Goods Inventory – Beginning = $ 62,750

• Finished Goods Inventory – Ending = $ 67,300

• Advertising expense = $ 94,000

• General and administrative expense = $ 129,300

First,

a. The cost of goods sold is calculated. It is calculated as under –

$\begin{array}{l} C o s t o f G o o d s s o l d = \\ C o s t o f G o o d s m a n u f a c t u r e d \\ + F i n i s h e d G o o d s I n v e n t o r y B e g i n n i n g \\ - F i n i s h e d G o o d s I n v e n t o r y E n d i n g \end{array}$

$\begin{array}{l} C o s t o f G o o d s s o l d = $ 534, 390 + $ 62, 750 - $ 67, 300 \\ C o s t o f G o o d s s o l d = $ 529, 840 \end{array}$

b. Gross profit is calculated as under –

$\begin{array}{l} G r o s s p r o f i t = S a l e s - C o s t o f G o o d s s o l d \\ G r o s s p r o f i t = $ 1, 250, 000 - $ 529, 840 \\ G r o s s p r o f i t = $ 720, 160 \end{array}$

c. Total selling and administrative expenses are calculated as under –

$\begin{array}{l} T o t a l s e l l i n g a n d a d m i n i s t r a t i v e e x p e n s e s = \\ A d v e r t i s i n g e x p e n s e \\ + G e n e r a l a n d a d m i n i s t r a t i v e e x p e n s e \end{array}$

$\begin{array}{l} T o t a l s e l l i n g a n d a d m i n i s t r a t i v e e x p e n s e s = $ 94, 000 + $ 129, 300 \\ T o t a l s e l l i n g a n d a d m i n i s t r a t i v e e x p e n s e s = $ 223, 300 \end{array}$

d. Net operating Income is calculated as under –

$\begin{array}{l} N e t o p e r a t i n g i n c o m e = G r o s s p r o f i t - T o t a l s e l l i n g a n d a d m i n i s t r a t i v e e x p e n s e s \\ N e t o p e r a t i n g i n c o m e = $ 720, 160 - $ 223, 300 \\ N e t o p e r a t i n g i n c o m e = $ 496, 860 \end{array}$

The income statement for Delray Mfg. has been prepared. The net income for the year ending December 31, 2017 is $ 496,860.

Conclusion

Thus, the income statement for Delray Mfg. for the year ending December 31, 2017 has been prepared.

Answer 6

Chapter 18, Problem 14E

To determine

Concept Introduction:

Income statement: An income statement can be defined as the statement explaining the company’s financial performance over a specific accounting period. The income or revenues are recorded on the income statement along with the expenses incurred for the period.

To prepare:

Income statement for Delray Mfg. (a manufacturer)

Expert Solution & Answer

Answer to Problem 14E

Solution:

*Delray Mfg.*
*Income statement*
*For the year Ended December 31, 2017*
Sales		$ 1,250,000
Less: Cost of goods sold
Cost of good manufactured	$ 534,390
Add: Finished Goods Inventory - Beginning	$ 62,750
Less: Finished Goods Inventory - Ending	$ 67,300
Cost of Goods sold		$ 529,840
Gross profit		$ 720,160
Less: Selling and administrative expenses
Advertising expense	$ 94,000
General and administrative expense	$ 129,300
Total selling and administrative expense		$ 223,300

Net Operating Income		$ 496,860

Explanation of Solution

The income statement is prepared as under –

Given,

• Sales = $ 1,250,000

• Cost of Goods manufactured = $ 534,390

• Finished Goods Inventory – Beginning = $ 62,750

• Finished Goods Inventory – Ending = $ 67,300

• Advertising expense = $ 94,000

• General and administrative expense = $ 129,300

First,

a. The cost of goods sold is calculated. It is calculated as under –

$\begin{array}{l} C o s t o f G o o d s s o l d = \\ C o s t o f G o o d s m a n u f a c t u r e d \\ + F i n i s h e d G o o d s I n v e n t o r y B e g i n n i n g \\ - F i n i s h e d G o o d s I n v e n t o r y E n d i n g \end{array}$

$\begin{array}{l} C o s t o f G o o d s s o l d = $ 534, 390 + $ 62, 750 - $ 67, 300 \\ C o s t o f G o o d s s o l d = $ 529, 840 \end{array}$

b. Gross profit is calculated as under –

$\begin{array}{l} G r o s s p r o f i t = S a l e s - C o s t o f G o o d s s o l d \\ G r o s s p r o f i t = $ 1, 250, 000 - $ 529, 840 \\ G r o s s p r o f i t = $ 720, 160 \end{array}$

c. Total selling and administrative expenses are calculated as under –

$\begin{array}{l} T o t a l s e l l i n g a n d a d m i n i s t r a t i v e e x p e n s e s = \\ A d v e r t i s i n g e x p e n s e \\ + G e n e r a l a n d a d m i n i s t r a t i v e e x p e n s e \end{array}$

$\begin{array}{l} T o t a l s e l l i n g a n d a d m i n i s t r a t i v e e x p e n s e s = $ 94, 000 + $ 129, 300 \\ T o t a l s e l l i n g a n d a d m i n i s t r a t i v e e x p e n s e s = $ 223, 300 \end{array}$

d. Net operating Income is calculated as under –

$\begin{array}{l} N e t o p e r a t i n g i n c o m e = G r o s s p r o f i t - T o t a l s e l l i n g a n d a d m i n i s t r a t i v e e x p e n s e s \\ N e t o p e r a t i n g i n c o m e = $ 720, 160 - $ 223, 300 \\ N e t o p e r a t i n g i n c o m e = $ 496, 860 \end{array}$

The income statement for Delray Mfg. has been prepared. The net income for the year ending December 31, 2017 is $ 496,860.

Conclusion

Thus, the income statement for Delray Mfg. for the year ending December 31, 2017 has been prepared.

Answer 7

Chapter 18, Problem 14E

To determine

Concept Introduction:

Income statement: An income statement can be defined as the statement explaining the company’s financial performance over a specific accounting period. The income or revenues are recorded on the income statement along with the expenses incurred for the period.

To prepare:

Income statement for Delray Mfg. (a manufacturer)

Answer 8

Expert Solution & Answer

Answer to Problem 14E

Solution:

*Delray Mfg.*
*Income statement*
*For the year Ended December 31, 2017*
Sales		$ 1,250,000
Less: Cost of goods sold
Cost of good manufactured	$ 534,390
Add: Finished Goods Inventory - Beginning	$ 62,750
Less: Finished Goods Inventory - Ending	$ 67,300
Cost of Goods sold		$ 529,840
Gross profit		$ 720,160
Less: Selling and administrative expenses
Advertising expense	$ 94,000
General and administrative expense	$ 129,300
Total selling and administrative expense		$ 223,300

Net Operating Income		$ 496,860

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Explanation of Solution

The income statement is prepared as under –

Given,

• Sales = $ 1,250,000

• Cost of Goods manufactured = $ 534,390

• Finished Goods Inventory – Beginning = $ 62,750

• Finished Goods Inventory – Ending = $ 67,300

• Advertising expense = $ 94,000

• General and administrative expense = $ 129,300

First,

a. The cost of goods sold is calculated. It is calculated as under –

$\begin{array}{l} C o s t o f G o o d s s o l d = \\ C o s t o f G o o d s m a n u f a c t u r e d \\ + F i n i s h e d G o o d s I n v e n t o r y B e g i n n i n g \\ - F i n i s h e d G o o d s I n v e n t o r y E n d i n g \end{array}$

$\begin{array}{l} C o s t o f G o o d s s o l d = $ 534, 390 + $ 62, 750 - $ 67, 300 \\ C o s t o f G o o d s s o l d = $ 529, 840 \end{array}$

b. Gross profit is calculated as under –

$\begin{array}{l} G r o s s p r o f i t = S a l e s - C o s t o f G o o d s s o l d \\ G r o s s p r o f i t = $ 1, 250, 000 - $ 529, 840 \\ G r o s s p r o f i t = $ 720, 160 \end{array}$

c. Total selling and administrative expenses are calculated as under –

$\begin{array}{l} T o t a l s e l l i n g a n d a d m i n i s t r a t i v e e x p e n s e s = \\ A d v e r t i s i n g e x p e n s e \\ + G e n e r a l a n d a d m i n i s t r a t i v e e x p e n s e \end{array}$

$\begin{array}{l} T o t a l s e l l i n g a n d a d m i n i s t r a t i v e e x p e n s e s = $ 94, 000 + $ 129, 300 \\ T o t a l s e l l i n g a n d a d m i n i s t r a t i v e e x p e n s e s = $ 223, 300 \end{array}$

d. Net operating Income is calculated as under –

$\begin{array}{l} N e t o p e r a t i n g i n c o m e = G r o s s p r o f i t - T o t a l s e l l i n g a n d a d m i n i s t r a t i v e e x p e n s e s \\ N e t o p e r a t i n g i n c o m e = $ 720, 160 - $ 223, 300 \\ N e t o p e r a t i n g i n c o m e = $ 496, 860 \end{array}$