Question

Presented below is information for Ivanhoe Company for the month of January 2017. Cost of goods sold $221,000 Rent expense $33,500 Freight-out 9,700 Sales discounts 8,600 Insurance expense 14,600 Sales returns and allowances 20,000 Salaries and wages expense 63,400 Sales revenue 392,500 Income tax expense 4,900 Other comprehensive income (net of $400 tax) 2,000 Collapse question part (a) Prepare an income statement using the multi-step format. IVANHOE COMPANY Income Statement.

Answer 1

Answer:

Sales revenue                         392,500

Sales returns and allowances (20,000)

Sales discounts                          (8,600)  

Net Sales:                                363,900

COGS                                      (221,000)

Gross Profit                            142,900

Freight-out                                  (9,700)

Salaries and wages expense (63,400)

Rent expense                          (33,500)

Insurance expense                 (14,600)  

Earnings before taxes             21,700

Income tax expense               (4,900)  

Operating income                    16,800

OCI                                              2,000  

Net Income                               18,800

Explanation:

First we solve for net sales.

Then we subtract COGS for Gross profit.

THen we subtract hte expenses and get hte earnings before taxes.

Next the inome tax expense and operationg income

then we put htis along with OCI for thenet income of the period.