The purpose of this assignment is to help you become familiar with the parts of the multiple‐step income statement.

Purpose of Assignment

The purpose of this assignment is to help you become familiar with the parts of the multiple‐step income statement.

Assignment Steps

Resources: Financial Accounting: Tools for Business Decision Making

Scenario: An inexperienced accountant prepared this condensed income statement for Simon Company, a retail firm that has been in business for a number of years.

 

SIMON COMPANY

Income Statement

For the Year Ended December 31, 2017

Revenues

Net sales

$850,000

Other revenues

22,000

872,000

Cost of goods sold

555,000

Gross profit

317,000

Operating expenses

Selling expenses

109,000

Administrative expenses

103,000

212,000

Net earnings

$105,000

As an experienced, knowledgeable accountant, you review the statement and determine the following facts:

Net sales consist of: sales $911,000, less freight-out on merchandise sold $33,000, and sales returns and allowances $28,000.

Other revenues consist of sales discounts $18,000 and rent revenue $4,000.

Selling expenses consist of salespersons’ salaries $80,000, depreciation on equipment $10,000, advertising $13,000, and sales commissions $6,000. The commissions represent commissions paid. At December 21, $3,000 of commissions have been earned by salespersons but have not been paid. All compensation should be recorded as Salaries and Wages Expense.

Administrative expenses consist of office salaries $47,000, dividends $18,000, utilities $12,000, interest expense $2,000, and rent expense $24,000, which includes prepayments totaling $6,000 for the first quarter of 2018.

Prepare a detailed multi-step income statement with a brief explanation of 700 words. Assume a 25% tax rate.

Show your work on the Excel® spreadsheet and submit with your explanation.

  • We offer what we promise and unlike others our support staffs are online 24/7. We guarantee money back if you do not get value for your Money.
  • The calculator below shall help you compute your pay for this assignment or any other assignment.
  • WE OFFER 6 HRS URGENT ORDERS AS WELL

Use DISCOUNT CODE DISC15 to enjoy 15% Discount on all orders while at the order page.
Do you need any clarifications ?????????
Contact our support staff ONLINE NOW via the CHAT.

Type of paper Academic level Subject area
Number of pages Paper urgency Cost per page:
 Total: