Question

The following data for the current year ended June 30 are from the accounting records of Zanadu Co.:

Answer 1

Answer:

Zanadu Co.

Multiple-step Income Statement for the year ended June 30

Sales Revenue                  $534,440

Cost of goods sold               181,440

Gross profit                      $353,000

Rent revenue                          1,500

Administrative expenses    28,750

Selling expenses                65,000

Total operating expenses (93,750)

Operating income          $260,750

Interest expense                  (3,600)

Income before taxes       $257,150

Income taxes (30%)             (77,145)

Net income                      $180,005

Explanation:

a) Data and Calculations:

Administrative expenses $28,750

Cost of goods sold 181,440

Interest expense 3,600

Rent revenue 1,500

Sales 534,440

Selling expenses 65,000

b) A 30% income tax has been assumed for this question.