The accountant of Headland Shoe Co. has compiled the following information from
ID: 2587632 • Letter: T
Question
The accountant of Headland Shoe Co. has compiled the following information from the company’s records as a basis for an income statement for the year ended December 31, 2017.
There were 20,130 shares of common stock outstanding during the year.
1. Prepare a multiple-step income statement.
Rent revenue $32,200 Interest expense 21,200 Market appreciation on land above cost 34,200 Salaries and wages expense (selling) 118,000 Supplies expense (selling) 20,800 Income tax 40,600 Salaries and wages expense (administrative) 139,100 Other administrative expenses 54,900 Cost of goods sold 499,200 Net sales 983,200 Depreciation on plant assets (70% selling, 30% administrative) 68,200 Cash dividends declared 19,200Explanation / Answer
Headland Shoe Co.
Income Statement
For the Year Ended December 31, 2017
Sales Revenue:
Total Sales
983200
Sales Returns
Sales Discounts
Net Sales Revenue
$983200
Less: Cost of Goods Sold:
Cost of Goods Sold
499200
Gross Profit
$484000
Operating Expenses
Selling Expenses:
Supplies expense (selling)
20800
Salaries and wages expense (selling)
118000
-138800
Administrative Expenses:
Salaries and wages expense (selling)
139100
Other administrative expense
54900
Depreciation on plant assets
68200
Total Operating Expenses
262200
Operating Income
$83000
Other Incomes and Expenses:
Rent Revenue
$32200
Market appreciation on Land above cost
34200
Interest Expense
-21200
Net Other Incomes and Expenses
45200
Net Income before tax
$128200
Income Tax
-40600
Net Income after tax
87600
Cash Dividend
19200
Retained Earnings
68400
Headland Shoe Co.
Income Statement
For the Year Ended December 31, 2017
Sales Revenue:
Total Sales
983200
Sales Returns
Sales Discounts
Net Sales Revenue
$983200
Less: Cost of Goods Sold:
Cost of Goods Sold
499200
Gross Profit
$484000
Operating Expenses
Selling Expenses:
Supplies expense (selling)
20800
Salaries and wages expense (selling)
118000
-138800
Administrative Expenses:
Salaries and wages expense (selling)
139100
Other administrative expense
54900
Depreciation on plant assets
68200
Total Operating Expenses
262200
Operating Income
$83000
Other Incomes and Expenses:
Rent Revenue
$32200
Market appreciation on Land above cost
34200
Interest Expense
-21200
Net Other Incomes and Expenses
45200
Net Income before tax
$128200
Income Tax
-40600
Net Income after tax
87600
Cash Dividend
19200
Retained Earnings
68400
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