Income Statement: The income statement can be explained as the statement giving details about the revenues, incomes, gains and expenses, losses etc. The income statement is prepared to determine net income or loss of the business by listing all the revenues, gains and expenses and losses of the business. It can be single step income statement as well multi step income statement. To prepare: Multi step income statement that includes separate categories for net sales, cost of goods sold, selling expenses, and general and administrative expenses

Question

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Answer 1

Question

Chapter 5, Problem 15E

To determine

Concept Introduction:

Income Statement:

The income statement can be explained as the statement giving details about the revenues, incomes, gains and expenses, losses etc. The income statement is prepared to determine net income or loss of the business by listing all the revenues, gains and expenses and losses of the business. It can be single step income statement as well multi step income statement.

To prepare:

Multi step income statement that includes separate categories for net sales, cost of goods sold, selling expenses, and general and administrative expenses

Expert Solution & Answer

Answer to Problem 15E

Fit-For-Life Food
Income Statement
For the year Ended December 31, 201X
Revenues
Sales		2,20,000
Less:
Sales returns and allowances	4,000
Sales discounts	16,000	20,000
Net Sales		2,00,000
Cost of Goods sold		90,000
Gross Profit		1,10,000
Expenses
Selling expenses
Sales Staff Wages	23,000
Rent Expense - Selling space	10,000
TV Advertising Expense	2,000
Sales Commission Expense	13,000
Total Selling Expense		48,000

General and Administrative Expense
Office Supplies Expense	700
Insurance Expense	1,300
Office Salaries Expense	32,500
Depreciation Expense - Office Copier	500

Total General and Administrative Expense		35000

Total Expense		83,000

Net Operating Income		27,000

Other Revenues, Gains, Expenses and Losses

Gain on Sale of Equipment	6,250
Interest Revenue	750

Total other Revenues, Gains, Expenses and Losses		7,000

Net Income		34,000

The above income statement is prepared as under −

Given,

Sales = $ 220,000
Sales discounts = $ 4,000
Sales returns and allowances = $ 16,000
Cost of goods sold = $ 90,000
Sales Staff Wages = $ 23,000
Rent Expense - Selling space = $ 10,000
TV Advertising Expense = $ 2,000
Sales Commission Expense = $ 13,000
Office Supplies Expense = $ 700
Insurance Expense = $ 1,300
Office Salaries Expense = $ 32,500
Depreciation Expense - Office Copier = $ 500
Gain on Sale of Equipment = $ 6,250
Interest Revenue = $ 750

Net Sales = Sales – Sales Discounts – Sales returns and allowancesNet Sales = $ 220,000 - $ 2,000 - $ 16,000Net Sales = $ 200,000

Gross Profit = Net Sales – Cost of goods soldGross Profit = $ 200,000 - $ 90,000Gross Profit = $ 110,000

Total selling expenses = (Sales Staff Wages +Rent Expense - Selling space + Sales Commission Expense + TVAdvertising Expense)Total selling expenses = $ 23,000 + $ 10,000 + $ 2,000 + $ 13,000Total selling expenses = $ 48,000

Total general and administrative expenses = (Office supplies expense + Insurance Expense+Depreciation Expense − Office Copier + Office Salareies Expense)Total general and administrative expenses = $ 700 + $ 1,300 + $32,500+$500Total general and administrative expenses = $ 35,000

Total Expenses = Total selling expenses + Total general and administrative expensesTotal Expenses = $ 48,000 + $ 35,000Total Expenses = $ 83,000Net Income = Gross profit – Total expensesNet Income = $ 110,000 − $ 83,000Net Income = $ 27,000

Total other Revenues, Gains, Expenses and Losses = Gain on Sale of Equipment + Interest RevenueTotal other Revenues, Gains, Expenses and Losses = $ 6,250 + $ 750Total other Revenues, Gains, Expenses and Losses = $ 7,000

Net Income = Net Operating Income + Total other Revenues, Gains, Expenses and LossesNet Income = $ 27,000 + $ 7,000Net Income = $ 34,000

Explanation of Solution

The above income statement is prepared as under −

Given,

Sales = $ 220,000
Sales discounts = $ 4,000
Sales returns and allowances = $ 16,000
Cost of goods sold = $ 90,000
Sales Staff Wages = $ 23,000
Rent Expense - Selling space = $ 10,000
TV Advertising Expense = $ 2,000
Sales Commission Expense = $ 13,000
Office Supplies Expense = $ 700
Insurance Expense = $ 1,300
Office Salaries Expense = $ 32,500
Depreciation Expense - Office Copier = $ 500
Gain on Sale of Equipment = $ 6,250
Interest Revenue = $ 750

Net Sales = Sales – Sales Discounts – Sales returns and allowancesNet Sales = $ 220,000 - $ 2,000 - $ 16,000Net Sales = $ 200,000

Gross Profit = Net Sales – Cost of goods soldGross Profit = $ 200,000 - $ 90,000Gross Profit = $ 110,000

Total selling expenses = (Sales Staff Wages +Rent Expense - Selling space + Sales Commission Expense + TVAdvertising Expense)Total selling expenses = $ 23,000 + $ 10,000 + $ 2,000 + $ 13,000Total selling expenses = $ 48,000

Total general and administrative expenses = (Office supplies expense + Insurance Expense+Depreciation Expense − Office Copier + Office Salareies Expense)Total general and administrative expenses = $ 700 + $ 1,300 + $32,500+$500Total general and administrative expenses = $ 35,000

Total Expenses = Total selling expenses + Total general and administrative expensesTotal Expenses = $ 48,000 + $ 35,000Total Expenses = $ 83,000Net Income = Gross profit – Total expensesNet Income = $ 110,000 − $ 83,000Net Income = $ 27,000

Total other Revenues, Gains, Expenses and Losses = Gain on Sale of Equipment + Interest RevenueTotal other Revenues, Gains, Expenses and Losses = $ 6,250 + $ 750Total other Revenues, Gains, Expenses and Losses = $ 7,000

Net Income = Net Operating Income + Total other Revenues, Gains, Expenses and LossesNet Income = $ 27,000 + $ 7,000Net Income = $ 34,000

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Question 3Footfall Manufacturing Ltd. reports the following financialinformation at the end of the current year: Net Sales $100,000 Debtor's turnover ratio (based on net sales) 2 Inventory turnover ratio 1.25 fixed assets turnover ratio 0.8 Debt to assets ratio 0.6 Net profit margin 5% gross profit margin 25% return on investments 2% Use the given information to fill out the templates for incomestatement and balance sheet given below: Income Statement of Footfall Manufacturing Ltd. for the year endingDecember 31, 20XX(in $) Sales 100,000 Cost of goods sold gross profit other expenses earnings before tax tax @ 50% Earnings after tax Balance Sheet of Footfall Manufacturing Ltd. as at December 31, 20XX(in $) Liabilities Amount Assets Amount Equity Net fixed assets long term debt 50,000 Inventory short term debt debtors cash Total Total

i need correct answer of this general accounting question

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Answer 2

Question

Chapter 5, Problem 15E

To determine

Concept Introduction:

Income Statement:

The income statement can be explained as the statement giving details about the revenues, incomes, gains and expenses, losses etc. The income statement is prepared to determine net income or loss of the business by listing all the revenues, gains and expenses and losses of the business. It can be single step income statement as well multi step income statement.

To prepare:

Multi step income statement that includes separate categories for net sales, cost of goods sold, selling expenses, and general and administrative expenses

Expert Solution & Answer

Answer to Problem 15E

Fit-For-Life Food
Income Statement
For the year Ended December 31, 201X
Revenues
Sales		2,20,000
Less:
Sales returns and allowances	4,000
Sales discounts	16,000	20,000
Net Sales		2,00,000
Cost of Goods sold		90,000
Gross Profit		1,10,000
Expenses
Selling expenses
Sales Staff Wages	23,000
Rent Expense - Selling space	10,000
TV Advertising Expense	2,000
Sales Commission Expense	13,000
Total Selling Expense		48,000

General and Administrative Expense
Office Supplies Expense	700
Insurance Expense	1,300
Office Salaries Expense	32,500
Depreciation Expense - Office Copier	500

Total General and Administrative Expense		35000

Total Expense		83,000

Net Operating Income		27,000

Other Revenues, Gains, Expenses and Losses

Gain on Sale of Equipment	6,250
Interest Revenue	750

Total other Revenues, Gains, Expenses and Losses		7,000

Net Income		34,000

The above income statement is prepared as under −

Given,

Sales = $ 220,000
Sales discounts = $ 4,000
Sales returns and allowances = $ 16,000
Cost of goods sold = $ 90,000
Sales Staff Wages = $ 23,000
Rent Expense - Selling space = $ 10,000
TV Advertising Expense = $ 2,000
Sales Commission Expense = $ 13,000
Office Supplies Expense = $ 700
Insurance Expense = $ 1,300
Office Salaries Expense = $ 32,500
Depreciation Expense - Office Copier = $ 500
Gain on Sale of Equipment = $ 6,250
Interest Revenue = $ 750

Net Sales = Sales – Sales Discounts – Sales returns and allowancesNet Sales = $ 220,000 - $ 2,000 - $ 16,000Net Sales = $ 200,000

Gross Profit = Net Sales – Cost of goods soldGross Profit = $ 200,000 - $ 90,000Gross Profit = $ 110,000

Total selling expenses = (Sales Staff Wages +Rent Expense - Selling space + Sales Commission Expense + TVAdvertising Expense)Total selling expenses = $ 23,000 + $ 10,000 + $ 2,000 + $ 13,000Total selling expenses = $ 48,000

Total general and administrative expenses = (Office supplies expense + Insurance Expense+Depreciation Expense − Office Copier + Office Salareies Expense)Total general and administrative expenses = $ 700 + $ 1,300 + $32,500+$500Total general and administrative expenses = $ 35,000

Total Expenses = Total selling expenses + Total general and administrative expensesTotal Expenses = $ 48,000 + $ 35,000Total Expenses = $ 83,000Net Income = Gross profit – Total expensesNet Income = $ 110,000 − $ 83,000Net Income = $ 27,000

Total other Revenues, Gains, Expenses and Losses = Gain on Sale of Equipment + Interest RevenueTotal other Revenues, Gains, Expenses and Losses = $ 6,250 + $ 750Total other Revenues, Gains, Expenses and Losses = $ 7,000

Net Income = Net Operating Income + Total other Revenues, Gains, Expenses and LossesNet Income = $ 27,000 + $ 7,000Net Income = $ 34,000

Explanation of Solution

The above income statement is prepared as under −

Given,

Sales = $ 220,000
Sales discounts = $ 4,000
Sales returns and allowances = $ 16,000
Cost of goods sold = $ 90,000
Sales Staff Wages = $ 23,000
Rent Expense - Selling space = $ 10,000
TV Advertising Expense = $ 2,000
Sales Commission Expense = $ 13,000
Office Supplies Expense = $ 700
Insurance Expense = $ 1,300
Office Salaries Expense = $ 32,500
Depreciation Expense - Office Copier = $ 500
Gain on Sale of Equipment = $ 6,250
Interest Revenue = $ 750

Net Sales = Sales – Sales Discounts – Sales returns and allowancesNet Sales = $ 220,000 - $ 2,000 - $ 16,000Net Sales = $ 200,000

Gross Profit = Net Sales – Cost of goods soldGross Profit = $ 200,000 - $ 90,000Gross Profit = $ 110,000

Total selling expenses = (Sales Staff Wages +Rent Expense - Selling space + Sales Commission Expense + TVAdvertising Expense)Total selling expenses = $ 23,000 + $ 10,000 + $ 2,000 + $ 13,000Total selling expenses = $ 48,000

Total general and administrative expenses = (Office supplies expense + Insurance Expense+Depreciation Expense − Office Copier + Office Salareies Expense)Total general and administrative expenses = $ 700 + $ 1,300 + $32,500+$500Total general and administrative expenses = $ 35,000

Total Expenses = Total selling expenses + Total general and administrative expensesTotal Expenses = $ 48,000 + $ 35,000Total Expenses = $ 83,000Net Income = Gross profit – Total expensesNet Income = $ 110,000 − $ 83,000Net Income = $ 27,000

Total other Revenues, Gains, Expenses and Losses = Gain on Sale of Equipment + Interest RevenueTotal other Revenues, Gains, Expenses and Losses = $ 6,250 + $ 750Total other Revenues, Gains, Expenses and Losses = $ 7,000

Net Income = Net Operating Income + Total other Revenues, Gains, Expenses and LossesNet Income = $ 27,000 + $ 7,000Net Income = $ 34,000

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Answer 3

Question

Chapter 5, Problem 15E

To determine

Concept Introduction:

Income Statement:

The income statement can be explained as the statement giving details about the revenues, incomes, gains and expenses, losses etc. The income statement is prepared to determine net income or loss of the business by listing all the revenues, gains and expenses and losses of the business. It can be single step income statement as well multi step income statement.

To prepare:

Multi step income statement that includes separate categories for net sales, cost of goods sold, selling expenses, and general and administrative expenses

Expert Solution & Answer

Answer to Problem 15E

Fit-For-Life Food
Income Statement
For the year Ended December 31, 201X
Revenues
Sales		2,20,000
Less:
Sales returns and allowances	4,000
Sales discounts	16,000	20,000
Net Sales		2,00,000
Cost of Goods sold		90,000
Gross Profit		1,10,000
Expenses
Selling expenses
Sales Staff Wages	23,000
Rent Expense - Selling space	10,000
TV Advertising Expense	2,000
Sales Commission Expense	13,000
Total Selling Expense		48,000

General and Administrative Expense
Office Supplies Expense	700
Insurance Expense	1,300
Office Salaries Expense	32,500
Depreciation Expense - Office Copier	500

Total General and Administrative Expense		35000

Total Expense		83,000

Net Operating Income		27,000

Other Revenues, Gains, Expenses and Losses

Gain on Sale of Equipment	6,250
Interest Revenue	750

Total other Revenues, Gains, Expenses and Losses		7,000

Net Income		34,000

The above income statement is prepared as under −

Given,

Sales = $ 220,000
Sales discounts = $ 4,000
Sales returns and allowances = $ 16,000
Cost of goods sold = $ 90,000
Sales Staff Wages = $ 23,000
Rent Expense - Selling space = $ 10,000
TV Advertising Expense = $ 2,000
Sales Commission Expense = $ 13,000
Office Supplies Expense = $ 700
Insurance Expense = $ 1,300
Office Salaries Expense = $ 32,500
Depreciation Expense - Office Copier = $ 500
Gain on Sale of Equipment = $ 6,250
Interest Revenue = $ 750

Net Sales = Sales – Sales Discounts – Sales returns and allowancesNet Sales = $ 220,000 - $ 2,000 - $ 16,000Net Sales = $ 200,000

Gross Profit = Net Sales – Cost of goods soldGross Profit = $ 200,000 - $ 90,000Gross Profit = $ 110,000

Total selling expenses = (Sales Staff Wages +Rent Expense - Selling space + Sales Commission Expense + TVAdvertising Expense)Total selling expenses = $ 23,000 + $ 10,000 + $ 2,000 + $ 13,000Total selling expenses = $ 48,000

Total general and administrative expenses = (Office supplies expense + Insurance Expense+Depreciation Expense − Office Copier + Office Salareies Expense)Total general and administrative expenses = $ 700 + $ 1,300 + $32,500+$500Total general and administrative expenses = $ 35,000

Total Expenses = Total selling expenses + Total general and administrative expensesTotal Expenses = $ 48,000 + $ 35,000Total Expenses = $ 83,000Net Income = Gross profit – Total expensesNet Income = $ 110,000 − $ 83,000Net Income = $ 27,000

Total other Revenues, Gains, Expenses and Losses = Gain on Sale of Equipment + Interest RevenueTotal other Revenues, Gains, Expenses and Losses = $ 6,250 + $ 750Total other Revenues, Gains, Expenses and Losses = $ 7,000

Net Income = Net Operating Income + Total other Revenues, Gains, Expenses and LossesNet Income = $ 27,000 + $ 7,000Net Income = $ 34,000

Explanation of Solution

The above income statement is prepared as under −

Given,

Sales = $ 220,000
Sales discounts = $ 4,000
Sales returns and allowances = $ 16,000
Cost of goods sold = $ 90,000
Sales Staff Wages = $ 23,000
Rent Expense - Selling space = $ 10,000
TV Advertising Expense = $ 2,000
Sales Commission Expense = $ 13,000
Office Supplies Expense = $ 700
Insurance Expense = $ 1,300
Office Salaries Expense = $ 32,500
Depreciation Expense - Office Copier = $ 500
Gain on Sale of Equipment = $ 6,250
Interest Revenue = $ 750

Net Sales = Sales – Sales Discounts – Sales returns and allowancesNet Sales = $ 220,000 - $ 2,000 - $ 16,000Net Sales = $ 200,000

Gross Profit = Net Sales – Cost of goods soldGross Profit = $ 200,000 - $ 90,000Gross Profit = $ 110,000

Total selling expenses = (Sales Staff Wages +Rent Expense - Selling space + Sales Commission Expense + TVAdvertising Expense)Total selling expenses = $ 23,000 + $ 10,000 + $ 2,000 + $ 13,000Total selling expenses = $ 48,000

Total general and administrative expenses = (Office supplies expense + Insurance Expense+Depreciation Expense − Office Copier + Office Salareies Expense)Total general and administrative expenses = $ 700 + $ 1,300 + $32,500+$500Total general and administrative expenses = $ 35,000

Total Expenses = Total selling expenses + Total general and administrative expensesTotal Expenses = $ 48,000 + $ 35,000Total Expenses = $ 83,000Net Income = Gross profit – Total expensesNet Income = $ 110,000 − $ 83,000Net Income = $ 27,000

Total other Revenues, Gains, Expenses and Losses = Gain on Sale of Equipment + Interest RevenueTotal other Revenues, Gains, Expenses and Losses = $ 6,250 + $ 750Total other Revenues, Gains, Expenses and Losses = $ 7,000

Net Income = Net Operating Income + Total other Revenues, Gains, Expenses and LossesNet Income = $ 27,000 + $ 7,000Net Income = $ 34,000

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Answer 4

Question

Chapter 5, Problem 15E

To determine

Concept Introduction:

Income Statement:

The income statement can be explained as the statement giving details about the revenues, incomes, gains and expenses, losses etc. The income statement is prepared to determine net income or loss of the business by listing all the revenues, gains and expenses and losses of the business. It can be single step income statement as well multi step income statement.

To prepare:

Multi step income statement that includes separate categories for net sales, cost of goods sold, selling expenses, and general and administrative expenses

Expert Solution & Answer

Answer to Problem 15E

Fit-For-Life Food
Income Statement
For the year Ended December 31, 201X
Revenues
Sales		2,20,000
Less:
Sales returns and allowances	4,000
Sales discounts	16,000	20,000
Net Sales		2,00,000
Cost of Goods sold		90,000
Gross Profit		1,10,000
Expenses
Selling expenses
Sales Staff Wages	23,000
Rent Expense - Selling space	10,000
TV Advertising Expense	2,000
Sales Commission Expense	13,000
Total Selling Expense		48,000

General and Administrative Expense
Office Supplies Expense	700
Insurance Expense	1,300
Office Salaries Expense	32,500
Depreciation Expense - Office Copier	500

Total General and Administrative Expense		35000

Total Expense		83,000

Net Operating Income		27,000

Other Revenues, Gains, Expenses and Losses

Gain on Sale of Equipment	6,250
Interest Revenue	750

Total other Revenues, Gains, Expenses and Losses		7,000

Net Income		34,000

The above income statement is prepared as under −

Given,

Sales = $ 220,000
Sales discounts = $ 4,000
Sales returns and allowances = $ 16,000
Cost of goods sold = $ 90,000
Sales Staff Wages = $ 23,000
Rent Expense - Selling space = $ 10,000
TV Advertising Expense = $ 2,000
Sales Commission Expense = $ 13,000
Office Supplies Expense = $ 700
Insurance Expense = $ 1,300
Office Salaries Expense = $ 32,500
Depreciation Expense - Office Copier = $ 500
Gain on Sale of Equipment = $ 6,250
Interest Revenue = $ 750

Net Sales = Sales – Sales Discounts – Sales returns and allowancesNet Sales = $ 220,000 - $ 2,000 - $ 16,000Net Sales = $ 200,000

Gross Profit = Net Sales – Cost of goods soldGross Profit = $ 200,000 - $ 90,000Gross Profit = $ 110,000

Total selling expenses = (Sales Staff Wages +Rent Expense - Selling space + Sales Commission Expense + TVAdvertising Expense)Total selling expenses = $ 23,000 + $ 10,000 + $ 2,000 + $ 13,000Total selling expenses = $ 48,000

Total general and administrative expenses = (Office supplies expense + Insurance Expense+Depreciation Expense − Office Copier + Office Salareies Expense)Total general and administrative expenses = $ 700 + $ 1,300 + $32,500+$500Total general and administrative expenses = $ 35,000

Total Expenses = Total selling expenses + Total general and administrative expensesTotal Expenses = $ 48,000 + $ 35,000Total Expenses = $ 83,000Net Income = Gross profit – Total expensesNet Income = $ 110,000 − $ 83,000Net Income = $ 27,000

Total other Revenues, Gains, Expenses and Losses = Gain on Sale of Equipment + Interest RevenueTotal other Revenues, Gains, Expenses and Losses = $ 6,250 + $ 750Total other Revenues, Gains, Expenses and Losses = $ 7,000

Net Income = Net Operating Income + Total other Revenues, Gains, Expenses and LossesNet Income = $ 27,000 + $ 7,000Net Income = $ 34,000

Explanation of Solution

The above income statement is prepared as under −

Given,

Sales = $ 220,000
Sales discounts = $ 4,000
Sales returns and allowances = $ 16,000
Cost of goods sold = $ 90,000
Sales Staff Wages = $ 23,000
Rent Expense - Selling space = $ 10,000
TV Advertising Expense = $ 2,000
Sales Commission Expense = $ 13,000
Office Supplies Expense = $ 700
Insurance Expense = $ 1,300
Office Salaries Expense = $ 32,500
Depreciation Expense - Office Copier = $ 500
Gain on Sale of Equipment = $ 6,250
Interest Revenue = $ 750

Net Sales = Sales – Sales Discounts – Sales returns and allowancesNet Sales = $ 220,000 - $ 2,000 - $ 16,000Net Sales = $ 200,000

Gross Profit = Net Sales – Cost of goods soldGross Profit = $ 200,000 - $ 90,000Gross Profit = $ 110,000

Total selling expenses = (Sales Staff Wages +Rent Expense - Selling space + Sales Commission Expense + TVAdvertising Expense)Total selling expenses = $ 23,000 + $ 10,000 + $ 2,000 + $ 13,000Total selling expenses = $ 48,000

Total general and administrative expenses = (Office supplies expense + Insurance Expense+Depreciation Expense − Office Copier + Office Salareies Expense)Total general and administrative expenses = $ 700 + $ 1,300 + $32,500+$500Total general and administrative expenses = $ 35,000

Total Expenses = Total selling expenses + Total general and administrative expensesTotal Expenses = $ 48,000 + $ 35,000Total Expenses = $ 83,000Net Income = Gross profit – Total expensesNet Income = $ 110,000 − $ 83,000Net Income = $ 27,000

Total other Revenues, Gains, Expenses and Losses = Gain on Sale of Equipment + Interest RevenueTotal other Revenues, Gains, Expenses and Losses = $ 6,250 + $ 750Total other Revenues, Gains, Expenses and Losses = $ 7,000

Net Income = Net Operating Income + Total other Revenues, Gains, Expenses and LossesNet Income = $ 27,000 + $ 7,000Net Income = $ 34,000

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Answer 5

Chapter 5, Problem 15E

To determine

Concept Introduction:

Income Statement:

The income statement can be explained as the statement giving details about the revenues, incomes, gains and expenses, losses etc. The income statement is prepared to determine net income or loss of the business by listing all the revenues, gains and expenses and losses of the business. It can be single step income statement as well multi step income statement.

To prepare:

Multi step income statement that includes separate categories for net sales, cost of goods sold, selling expenses, and general and administrative expenses

Expert Solution & Answer

Answer to Problem 15E

Fit-For-Life Food
Income Statement
For the year Ended December 31, 201X
Revenues
Sales		2,20,000
Less:
Sales returns and allowances	4,000
Sales discounts	16,000	20,000
Net Sales		2,00,000
Cost of Goods sold		90,000
Gross Profit		1,10,000
Expenses
Selling expenses
Sales Staff Wages	23,000
Rent Expense - Selling space	10,000
TV Advertising Expense	2,000
Sales Commission Expense	13,000
Total Selling Expense		48,000

General and Administrative Expense
Office Supplies Expense	700
Insurance Expense	1,300
Office Salaries Expense	32,500
Depreciation Expense - Office Copier	500

Total General and Administrative Expense		35000

Total Expense		83,000

Net Operating Income		27,000

Other Revenues, Gains, Expenses and Losses

Gain on Sale of Equipment	6,250
Interest Revenue	750

Total other Revenues, Gains, Expenses and Losses		7,000

Net Income		34,000

The above income statement is prepared as under −

Given,

Sales = $ 220,000
Sales discounts = $ 4,000
Sales returns and allowances = $ 16,000
Cost of goods sold = $ 90,000
Sales Staff Wages = $ 23,000
Rent Expense - Selling space = $ 10,000
TV Advertising Expense = $ 2,000
Sales Commission Expense = $ 13,000
Office Supplies Expense = $ 700
Insurance Expense = $ 1,300
Office Salaries Expense = $ 32,500
Depreciation Expense - Office Copier = $ 500
Gain on Sale of Equipment = $ 6,250
Interest Revenue = $ 750

Net Sales = Sales – Sales Discounts – Sales returns and allowancesNet Sales = $ 220,000 - $ 2,000 - $ 16,000Net Sales = $ 200,000

Gross Profit = Net Sales – Cost of goods soldGross Profit = $ 200,000 - $ 90,000Gross Profit = $ 110,000

Total selling expenses = (Sales Staff Wages +Rent Expense - Selling space + Sales Commission Expense + TVAdvertising Expense)Total selling expenses = $ 23,000 + $ 10,000 + $ 2,000 + $ 13,000Total selling expenses = $ 48,000

Total general and administrative expenses = (Office supplies expense + Insurance Expense+Depreciation Expense − Office Copier + Office Salareies Expense)Total general and administrative expenses = $ 700 + $ 1,300 + $32,500+$500Total general and administrative expenses = $ 35,000

Total Expenses = Total selling expenses + Total general and administrative expensesTotal Expenses = $ 48,000 + $ 35,000Total Expenses = $ 83,000Net Income = Gross profit – Total expensesNet Income = $ 110,000 − $ 83,000Net Income = $ 27,000

Total other Revenues, Gains, Expenses and Losses = Gain on Sale of Equipment + Interest RevenueTotal other Revenues, Gains, Expenses and Losses = $ 6,250 + $ 750Total other Revenues, Gains, Expenses and Losses = $ 7,000

Net Income = Net Operating Income + Total other Revenues, Gains, Expenses and LossesNet Income = $ 27,000 + $ 7,000Net Income = $ 34,000

Explanation of Solution

The above income statement is prepared as under −

Given,

Sales = $ 220,000
Sales discounts = $ 4,000
Sales returns and allowances = $ 16,000
Cost of goods sold = $ 90,000
Sales Staff Wages = $ 23,000
Rent Expense - Selling space = $ 10,000
TV Advertising Expense = $ 2,000
Sales Commission Expense = $ 13,000
Office Supplies Expense = $ 700
Insurance Expense = $ 1,300
Office Salaries Expense = $ 32,500
Depreciation Expense - Office Copier = $ 500
Gain on Sale of Equipment = $ 6,250
Interest Revenue = $ 750

Net Sales = Sales – Sales Discounts – Sales returns and allowancesNet Sales = $ 220,000 - $ 2,000 - $ 16,000Net Sales = $ 200,000

Gross Profit = Net Sales – Cost of goods soldGross Profit = $ 200,000 - $ 90,000Gross Profit = $ 110,000

Total selling expenses = (Sales Staff Wages +Rent Expense - Selling space + Sales Commission Expense + TVAdvertising Expense)Total selling expenses = $ 23,000 + $ 10,000 + $ 2,000 + $ 13,000Total selling expenses = $ 48,000

Total general and administrative expenses = (Office supplies expense + Insurance Expense+Depreciation Expense − Office Copier + Office Salareies Expense)Total general and administrative expenses = $ 700 + $ 1,300 + $32,500+$500Total general and administrative expenses = $ 35,000

Total Expenses = Total selling expenses + Total general and administrative expensesTotal Expenses = $ 48,000 + $ 35,000Total Expenses = $ 83,000Net Income = Gross profit – Total expensesNet Income = $ 110,000 − $ 83,000Net Income = $ 27,000

Total other Revenues, Gains, Expenses and Losses = Gain on Sale of Equipment + Interest RevenueTotal other Revenues, Gains, Expenses and Losses = $ 6,250 + $ 750Total other Revenues, Gains, Expenses and Losses = $ 7,000

Net Income = Net Operating Income + Total other Revenues, Gains, Expenses and LossesNet Income = $ 27,000 + $ 7,000Net Income = $ 34,000

Answer 6

Chapter 5, Problem 15E

To determine

Concept Introduction:

Income Statement:

The income statement can be explained as the statement giving details about the revenues, incomes, gains and expenses, losses etc. The income statement is prepared to determine net income or loss of the business by listing all the revenues, gains and expenses and losses of the business. It can be single step income statement as well multi step income statement.

To prepare:

Multi step income statement that includes separate categories for net sales, cost of goods sold, selling expenses, and general and administrative expenses

Expert Solution & Answer

Answer to Problem 15E

Fit-For-Life Food
Income Statement
For the year Ended December 31, 201X
Revenues
Sales		2,20,000
Less:
Sales returns and allowances	4,000
Sales discounts	16,000	20,000
Net Sales		2,00,000
Cost of Goods sold		90,000
Gross Profit		1,10,000
Expenses
Selling expenses
Sales Staff Wages	23,000
Rent Expense - Selling space	10,000
TV Advertising Expense	2,000
Sales Commission Expense	13,000
Total Selling Expense		48,000

General and Administrative Expense
Office Supplies Expense	700
Insurance Expense	1,300
Office Salaries Expense	32,500
Depreciation Expense - Office Copier	500

Total General and Administrative Expense		35000

Total Expense		83,000

Net Operating Income		27,000

Other Revenues, Gains, Expenses and Losses

Gain on Sale of Equipment	6,250
Interest Revenue	750

Total other Revenues, Gains, Expenses and Losses		7,000

Net Income		34,000

The above income statement is prepared as under −

Given,

Sales = $ 220,000
Sales discounts = $ 4,000
Sales returns and allowances = $ 16,000
Cost of goods sold = $ 90,000
Sales Staff Wages = $ 23,000
Rent Expense - Selling space = $ 10,000
TV Advertising Expense = $ 2,000
Sales Commission Expense = $ 13,000
Office Supplies Expense = $ 700
Insurance Expense = $ 1,300
Office Salaries Expense = $ 32,500
Depreciation Expense - Office Copier = $ 500
Gain on Sale of Equipment = $ 6,250
Interest Revenue = $ 750

Net Sales = Sales – Sales Discounts – Sales returns and allowancesNet Sales = $ 220,000 - $ 2,000 - $ 16,000Net Sales = $ 200,000

Gross Profit = Net Sales – Cost of goods soldGross Profit = $ 200,000 - $ 90,000Gross Profit = $ 110,000

Total selling expenses = (Sales Staff Wages +Rent Expense - Selling space + Sales Commission Expense + TVAdvertising Expense)Total selling expenses = $ 23,000 + $ 10,000 + $ 2,000 + $ 13,000Total selling expenses = $ 48,000

Total general and administrative expenses = (Office supplies expense + Insurance Expense+Depreciation Expense − Office Copier + Office Salareies Expense)Total general and administrative expenses = $ 700 + $ 1,300 + $32,500+$500Total general and administrative expenses = $ 35,000

Total Expenses = Total selling expenses + Total general and administrative expensesTotal Expenses = $ 48,000 + $ 35,000Total Expenses = $ 83,000Net Income = Gross profit – Total expensesNet Income = $ 110,000 − $ 83,000Net Income = $ 27,000

Total other Revenues, Gains, Expenses and Losses = Gain on Sale of Equipment + Interest RevenueTotal other Revenues, Gains, Expenses and Losses = $ 6,250 + $ 750Total other Revenues, Gains, Expenses and Losses = $ 7,000

Net Income = Net Operating Income + Total other Revenues, Gains, Expenses and LossesNet Income = $ 27,000 + $ 7,000Net Income = $ 34,000

Explanation of Solution

The above income statement is prepared as under −

Given,

Sales = $ 220,000
Sales discounts = $ 4,000
Sales returns and allowances = $ 16,000
Cost of goods sold = $ 90,000
Sales Staff Wages = $ 23,000
Rent Expense - Selling space = $ 10,000
TV Advertising Expense = $ 2,000
Sales Commission Expense = $ 13,000
Office Supplies Expense = $ 700
Insurance Expense = $ 1,300
Office Salaries Expense = $ 32,500
Depreciation Expense - Office Copier = $ 500
Gain on Sale of Equipment = $ 6,250
Interest Revenue = $ 750

Net Sales = Sales – Sales Discounts – Sales returns and allowancesNet Sales = $ 220,000 - $ 2,000 - $ 16,000Net Sales = $ 200,000

Gross Profit = Net Sales – Cost of goods soldGross Profit = $ 200,000 - $ 90,000Gross Profit = $ 110,000

Total selling expenses = (Sales Staff Wages +Rent Expense - Selling space + Sales Commission Expense + TVAdvertising Expense)Total selling expenses = $ 23,000 + $ 10,000 + $ 2,000 + $ 13,000Total selling expenses = $ 48,000

Total general and administrative expenses = (Office supplies expense + Insurance Expense+Depreciation Expense − Office Copier + Office Salareies Expense)Total general and administrative expenses = $ 700 + $ 1,300 + $32,500+$500Total general and administrative expenses = $ 35,000

Total Expenses = Total selling expenses + Total general and administrative expensesTotal Expenses = $ 48,000 + $ 35,000Total Expenses = $ 83,000Net Income = Gross profit – Total expensesNet Income = $ 110,000 − $ 83,000Net Income = $ 27,000

Total other Revenues, Gains, Expenses and Losses = Gain on Sale of Equipment + Interest RevenueTotal other Revenues, Gains, Expenses and Losses = $ 6,250 + $ 750Total other Revenues, Gains, Expenses and Losses = $ 7,000

Net Income = Net Operating Income + Total other Revenues, Gains, Expenses and LossesNet Income = $ 27,000 + $ 7,000Net Income = $ 34,000

Answer 7

Chapter 5, Problem 15E

To determine

Concept Introduction:

Income Statement:

The income statement can be explained as the statement giving details about the revenues, incomes, gains and expenses, losses etc. The income statement is prepared to determine net income or loss of the business by listing all the revenues, gains and expenses and losses of the business. It can be single step income statement as well multi step income statement.

To prepare:

Multi step income statement that includes separate categories for net sales, cost of goods sold, selling expenses, and general and administrative expenses

Answer 8

Expert Solution & Answer

Answer to Problem 15E

Fit-For-Life Food
Income Statement
For the year Ended December 31, 201X
Revenues
Sales		2,20,000
Less:
Sales returns and allowances	4,000
Sales discounts	16,000	20,000
Net Sales		2,00,000
Cost of Goods sold		90,000
Gross Profit		1,10,000
Expenses
Selling expenses
Sales Staff Wages	23,000
Rent Expense - Selling space	10,000
TV Advertising Expense	2,000
Sales Commission Expense	13,000
Total Selling Expense		48,000

General and Administrative Expense
Office Supplies Expense	700
Insurance Expense	1,300
Office Salaries Expense	32,500
Depreciation Expense - Office Copier	500

Total General and Administrative Expense		35000

Total Expense		83,000

Net Operating Income		27,000

Other Revenues, Gains, Expenses and Losses

Gain on Sale of Equipment	6,250
Interest Revenue	750

Total other Revenues, Gains, Expenses and Losses		7,000

Net Income		34,000

The above income statement is prepared as under −

Given,

Sales = $ 220,000
Sales discounts = $ 4,000
Sales returns and allowances = $ 16,000
Cost of goods sold = $ 90,000
Sales Staff Wages = $ 23,000
Rent Expense - Selling space = $ 10,000
TV Advertising Expense = $ 2,000
Sales Commission Expense = $ 13,000
Office Supplies Expense = $ 700
Insurance Expense = $ 1,300
Office Salaries Expense = $ 32,500
Depreciation Expense - Office Copier = $ 500
Gain on Sale of Equipment = $ 6,250
Interest Revenue = $ 750

Net Sales = Sales – Sales Discounts – Sales returns and allowancesNet Sales = $ 220,000 - $ 2,000 - $ 16,000Net Sales = $ 200,000

Gross Profit = Net Sales – Cost of goods soldGross Profit = $ 200,000 - $ 90,000Gross Profit = $ 110,000

Total selling expenses = (Sales Staff Wages +Rent Expense - Selling space + Sales Commission Expense + TVAdvertising Expense)Total selling expenses = $ 23,000 + $ 10,000 + $ 2,000 + $ 13,000Total selling expenses = $ 48,000

Total general and administrative expenses = (Office supplies expense + Insurance Expense+Depreciation Expense − Office Copier + Office Salareies Expense)Total general and administrative expenses = $ 700 + $ 1,300 + $32,500+$500Total general and administrative expenses = $ 35,000

Total Expenses = Total selling expenses + Total general and administrative expensesTotal Expenses = $ 48,000 + $ 35,000Total Expenses = $ 83,000Net Income = Gross profit – Total expensesNet Income = $ 110,000 − $ 83,000Net Income = $ 27,000

Total other Revenues, Gains, Expenses and Losses = Gain on Sale of Equipment + Interest RevenueTotal other Revenues, Gains, Expenses and Losses = $ 6,250 + $ 750Total other Revenues, Gains, Expenses and Losses = $ 7,000

Net Income = Net Operating Income + Total other Revenues, Gains, Expenses and LossesNet Income = $ 27,000 + $ 7,000Net Income = $ 34,000

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Explanation of Solution

The above income statement is prepared as under −

Given,

Sales = $ 220,000
Sales discounts = $ 4,000
Sales returns and allowances = $ 16,000
Cost of goods sold = $ 90,000
Sales Staff Wages = $ 23,000
Rent Expense - Selling space = $ 10,000
TV Advertising Expense = $ 2,000
Sales Commission Expense = $ 13,000
Office Supplies Expense = $ 700
Insurance Expense = $ 1,300
Office Salaries Expense = $ 32,500
Depreciation Expense - Office Copier = $ 500
Gain on Sale of Equipment = $ 6,250
Interest Revenue = $ 750

Net Sales = Sales – Sales Discounts – Sales returns and allowancesNet Sales = $ 220,000 - $ 2,000 - $ 16,000Net Sales = $ 200,000

Gross Profit = Net Sales – Cost of goods soldGross Profit = $ 200,000 - $ 90,000Gross Profit = $ 110,000

Total selling expenses = (Sales Staff Wages +Rent Expense - Selling space + Sales Commission Expense + TVAdvertising Expense)Total selling expenses = $ 23,000 + $ 10,000 + $ 2,000 + $ 13,000Total selling expenses = $ 48,000

Total general and administrative expenses = (Office supplies expense + Insurance Expense+Depreciation Expense − Office Copier + Office Salareies Expense)Total general and administrative expenses = $ 700 + $ 1,300 + $32,500+$500Total general and administrative expenses = $ 35,000

Total Expenses = Total selling expenses + Total general and administrative expensesTotal Expenses = $ 48,000 + $ 35,000Total Expenses = $ 83,000Net Income = Gross profit – Total expensesNet Income = $ 110,000 − $ 83,000Net Income = $ 27,000

Total other Revenues, Gains, Expenses and Losses = Gain on Sale of Equipment + Interest RevenueTotal other Revenues, Gains, Expenses and Losses = $ 6,250 + $ 750Total other Revenues, Gains, Expenses and Losses = $ 7,000

Net Income = Net Operating Income + Total other Revenues, Gains, Expenses and LossesNet Income = $ 27,000 + $ 7,000Net Income = $ 34,000

Answer 12

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