Question

Presented below is information for Pharoah Company for the month of January 2017.

Answer 1

Answer:

Pharaoh Company

Income Statement

For the month ended January 31, 2017

Sales                                                                         $390,000

• Sales discounts                          ($8,200)
• Sales returns and allowances ($19,300)       ($27,500)

Net sales                                                                  $362,500

Cost of goods sold                                                 ($204,700)

Gross profit                                                                $157,800

Operating expenses:

Selling expense

• Salaries and wages expense   ($63,300)
• Rent expense                            ($34,200 )
• Insurance expense                    ($13,400)
• Freight-out                                  ($9,600)     ($120,500)

Operating income                                                      $37,300

Income tax expense                                                   (5,400)

Net operating income                                                $31,900

Other comprehensive income (net of $400 tax)     $2,000

Net income                                                                $33,900