Question 1: Angelica Vasquez had the following balances. Sales Revenue 3,053,081

Question

Question 1: Angelica Vasquez had the following balances.
Sales Revenue 3,053,081
Cost of goods sold 1,982,541
Salaries and commissions 509,044
Travel and entertainment expenses 48,940
Advertising expenses 38,315
Freight expenses 41,209
Shipping supplies and expenses 24,712
Postage and stationery 19,663
Telephone and internet expenses 12,215
Depreciation of equipment 25,005
Depreciation of building 18,059
Legal and professional services expenses 23,721
Insurance expense 17,029
Utilities expense 23,275
Miscellaneous office expense 2,612
Other Incomes
Dividend revenue 98,500
Rental revenue 42,910
Gain on sale of plant assets 30,000

Required: Prepare Angelica’s Income Statement for year ended January 31 2017





From the following TB of Mike, a store owner, prepare an Income Statement for the year ended December 31 2015 and a Balance Sheet as at that date
$
Sales Revenue 395,000
Cost of Sales 323,800
Wages and salaries 30,000
Insurance expense 6,000
Telephone expense 1,000
Shop Fittings, cost 40,000
Motor Car, cost 30,000
Account Receivable
Machinery                                                                                                                                9,800
20,300
Account Payable 61,100
Bad debts 200
Owner, Capital 179,800
Cash balance
Building 3,000
50,000
Drawings 1,800
Inventory (December 31, 2016) 120,000

Note
1. Accrued wages $3,500
2. Insurance prepaid $500
3. Provision for doubtful debts to be 2.5% of AR
4. Telephone outstanding $120
5. Depreciate Shop Fittings at 5.5% and motor car at 10% p.a, on cost

Explanation / Answer

1.

Income statement for the year ended January 31,2017

2.

Income statement for the year ended December 31,2015

Balance sheet as on December 31, 2015

Motor car

less: depreciation

$30000

($3000)

Fittings

less: depreciation

$40000

($2200)

Accounts receivable

less: provision for doubtful debts

$9800

($240)

Particulars Amount($) Amount($) Sales $3053081 Cost of goods sold ($1982541) Gross profit $1070540 Operating expenses: Salaries and commissions $509044 Travel and entertainment expenses $48940 Advertisement expenses $38315 Freight expenses $41209 Shipping supplies and expenses $24712 Postage and stationary $19663 Telephone and internet expenses $12215 Depreciation of equipment $25005 Depreciation of building $18059 Legal and professional services $23721 Insurance expenses $17029 Utilities expenses $23275 Miscellenous office expenses $2612 Total operating expenses $803799 Operating profit $266741 Other incomes: Dividend revenue $98500 Rental revenue $42910 Gain on sale $30000 Net income $438151.

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