Question

Cash $207,200 Salaries and wages expense (sales) $318,080 Inventory 599,200 Salaries and wages expense (office) 387,520 Sales revenue 4,788,000 Purchase returns 16,800 Unearned sales revenue 131,040 Sales returns and allowances 88,480 Purchases 3,120,320 Freight-in 80,640 Sales discounts 38,080 Accounts receivable 159,600 Purchase discounts 30,240 Sales commissions 92,960 Selling expenses 77,280 Telephone and Internet expense (sales) 19,040 Accounting and legal services 36,960 Utilities expense (office) 35,840 Insurance expense (office) 26,880 Miscellaneous office expenses 8,960 Advertising expense 60,480 Rent revenue 268,800 Delivery expense 104,160 Casualty loss (before tax) 78,400 Depreciation expense (office equipment) 53,760 Interest expense 197,120 Depreciation expense (sales equipment) 40,320 Common stock ($10 par) 650,720 Coronado’s effective tax rate on all items is 20%. A physical inventory indicates that the ending inventory is $686,000. Prepare a condensed 2017 income statement for Culver Corporation

Answer 1

Answer:

 condenced income statement  

   

net sales                                  4699520

cost of sales                          (3097360)

opening stock     599200  

purchase            3120320  

returns                   ( 16800 )

frieght in                     80640  

closing stock             (686000)  

gross profit                              1602160

other incomes                      299040

purchase discount  30240  

rent income                268800  

expenses                               (1092448 )

office salary                 387520  

sales salary                 31808  

sales discount         38080  

commission                 92960  

selling costs                 77280  

telephone costs         19040  

accounting service 36960  

utility costs                35840  

insurance                26880  

mascellaneous         8960  

advertising               60480  

delivery costs               104160  

casuality loss               78400  

depreciation-office 53760  

depreciation-sales         40320  

   

operating profit                        808752

interest expense         197120     (  197120 )

profit before tax                          611632

tax expense                                (122326.4)

profit after tax                                           489305.6

Explanation:

To get the net sales we take sales and minus sales return. The unearned sales are not to be recorded until they are earned and its performance obligation is satisfied. The balance sheet items such as common stock, cash do not belong in the statement of comprehensive incomes. T o calculate tax expense we take profit before tax and multiply by the tax rate.