Acc280 Financial Accounting: P5-5A An inexperienced accountant prepared (Hight Company)

Acc280 Financial Accounting
P5-5A
An inexperienced accountant prepared this condensed income statement for Hight Company, a retail firm that has been in business for a number of years.
HIGHT COMPANY
Income Statement
For the Year Ended December 31, 2010
Revenues
Net sales 850,000
Other revenues 22,000
872,000
Cost of goods sold 555,000
Gross Profit 317,000
Operating Expenses
Selling expenses 109,000
Administrative expenses 103,000
Total expenses 212,000
Net earnings 105,000

As an experienced, knowledgeable accountant, you review the statement and determine the following facts.
1. Net sales consist of sales $911,000, less delivery expense on merchandise sold $31,000, and sales returns and allowances $30,000.
2. Other revenues consist of sales discounts $14,000 and rent revenue $8,000.
3. Selling expenses consist of salespersons' salaries $80,000; depreciation on accounting equipment $8,000 advertising $15,000; and sales commissions $6,000. The commissions represent commission paid. At December 31, $3,000 of commissions have been earned by salespersons but have not been paid.
4. Administrative expenses consist of office salaries $47,000; dividends $18,000; utilities $12,000; interest expense $2,000; and rent expense $24,000, which includes prepayments totaling $4,000 for the first quarter of 2011.

Complete the correct detailed multiple-step income statement below. Assume a 25% tax rate. (List multiple accounts from largest to smallest amount, e.g. 10, 5, 2.)
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