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pantera1 [17]
3 years ago
5

Psymon Company, Inc. sells construction equipment. The annual fiscal period ends on December 31. The following adjusted trial ba

lance was created from the general ledger accounts on December 31:
Account Titles Debits Credits
Cash $ 59,810
Accounts Receivable 24,800
Inventory 90,500
Property and Equipment 67,000
Accumulated Depreciation $ 28,100
Liabilities 41,900
Common Stock 124,000
Retained Earnings, January 115,000
Sales Revenue 258,500
Sales Returns and Allowances 8,700
Sales Discounts 11,400
Cost of Goods Sold 138,800
Salaries and Wages Expense 23,800
Office Expense 24,800
Interest Expenses 3,700
Income Tax Expense 14,190
Totals $ 467,500 $ 467,500
Required:
1. Prepare a multistep income statement that would be used for internal reporting purposes. Treat Sales Discounts and Sales Returns and Allowances as contra-revenue accounts. TIP: Some of the accounts listed will appear on the balance sheet rather than the income statement.
2. Prepare a multistep income statement that would be used for external reporting purposes, beginning with the amount for Net Sales.
Business
1 answer:
Anestetic [448]3 years ago
8 0

Answer:

1. Multi-step income statement Internal Reporting Purposes

Sales Revenue                                                                  258,500

Less Sales Returns and Allowances                                  (8,700)

Less Sales Discounts                                                          (11,400)

Net Sales                                                                            238,400

Less Cost of Goods Sold                                                  (138,800)

Gross Profit                                                                          99,600

Less Operating Expenses :

Salaries and Wages Expense                          23,800

Office Expense                                                  24,800    (48,600)

Operating Income/(loss)                                                     51,000

Less Non- Operating Expenses :

Interest Expenses                                              3,700

Income Tax Expense                                         14,190     (17,890)

Net Income/Loss                                                                 33,100

2. Multi-step income statement External Reporting Purposes

Net Sales                                                                            238,400

Less Cost of Goods Sold                                                  (138,800)

Gross Profit                                                                          99,600

Less Operating Expenses :

Salaries and Wages Expense                          23,800

Office Expense                                                  24,800    (48,600)

Operating Income/(loss)                                                     51,000

Less Non- Operating Expenses :

Interest Expenses                                              3,700

Income Tax Expense                                         14,190     (17,890)

Net Income/Loss                                                                 33,100

Explanation:

It is important to remember that a multi-step income statement shows separately profit earned from <em>Primary Activities</em> of the firm and that earned from <em>Secondary Activities</em>.

There are no strict rules for preparation of Financial Statements for <em>Internal use</em> and this may include many other line items. However for <em>external reporting</em> proposes, preparers of financial statements have to comply with Accounting Standards (GAAP or IFRS).

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During 2019 the Barker Company had a net income of $75,000. Below is information taken from Barker’s last two balance sheets: 20
Kitty [74]

Answer:

cash provided by operating activities  84,000

Explanation:

net income  75,000

Adjustment (A)

gain on land   (500)

depreciation   1,500

Adjusted net income                  76,000

Change in working capital

↑account receivable   (3,000) (B)

↓long term AR             10,000 (C)

↑Account payable         1,000 (D)

Net changes                               8,000

cash provided by operating activities  84,000

<u>Notes:</u>

(A)

The net income may have non-monetary term, we need to remove those to get and adjusted net income on a cash basis

the gain on land is not a monetary term. We will record the proceeds in cash for the sale under investment activities, not operating as the business is not selling land every year.

depreciation is an accounting metric, is not an actual expense, it doesn't involve cash.

(B)

the increasein the Ar means more sales were not collected therefore, less cash collected.

(C)

the decrease in the long term AR  represent the collection, so it increases the cash

(D)

the increase in account payable represent the delay of payment, so company has more cash available.

7 0
2 years ago
Financial Statements from the End-of-Period Spreadsheet
alexdok [17]

Answer: See explanation

Explanation:

Triton Consulting Income Statement For the Year Ended April 30, 20Y3:

Fees earned 279000

Less: Expenses:

Salary expenses = 242000

Supplies expenses 1650

Depreciation expense. 900

Miscellaneous expenses 2000

Total expense = 246550

Net income 32450

Triton Consulting Balance Sheet April 30, 20Y3

Assets

Current assets

Cash 21500

Account receivable 51150

Supplies 750

Total current asset = 73400

Property, plant and equipments

Office equipment 32000

Accumulated Depreciation 5400

Total property,plant and equipment = 26600

Total asset = 100,000

Liabilities

Current liabilities:

Account payable: 3350

Salary payable: 2000

Total liabilities = 5350

Stockholders equity

Common stock 20000

Retained earnings 74650

Total stockholders equity = 94650

Total liability and stockholders equity = 100,000

5 0
3 years ago
Foreign businesses in India appear to receive unusually close scrutiny and must meet special regulations, aimed at protecting lo
svlad2 [7]

Answer: .A) nontariff trade barrier

Explanation:

A Non-Tariff trade barrier as the term implies, refers to measures apart from the imposition of tariffs meant to protect local businesses in a country by restricting the trade of international products in that same country.

Such measures include but are not limited to,

• Quotas,

• Levies,

• Embargos, and

• Sanctions etc

6 0
3 years ago
Recent U.S. Supreme Court decisions solidified the idea that the ADEA is designed specifically to protect older workers from dis
Lyrx [107]

Answer:

True

Explanation:

There are several Supreme Court Rulings regarding the ADEA during the past two decades, most of them concerning technical issues, but  the most straightforward ruling regarding the question is:

General Dynamics Land Systems, Inc. v. Cline, 540 U.S. 581 (2004)

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7 0
3 years ago
Given the list of accounts below, identify which of them would appear on a balance sheet. (Check all that apply.)
aksik [14]

Answer:

(A) Accounts Payable - Liabilities

(D) Equipment  - Assets

(E) Supplies  - Assets

(F) Retained earning - Owner's Equity

(H) Cash  - Assets

Explanation:

The major categories in a balance sheets are: Assets, Liabilities and Owner's Equity,

Assets are many things (as equipment, machinery, Receivables, etc)  that belongs to the company, please see details in the answer.

Liabilities represent the obligations of the company with all kind of creditors.

And finally Owner's Equity it's the Capital that support part of the Assets along with the Liabilites.

4 0
3 years ago
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