00:01
Hello students, let us solve the problem.
00:03
So here is a question which asking us to prepare an income statement for simon company.
00:09
So there are revenues and income statement given for the end of 31st december 2017 and we need to create an income statement for the present year and there are some adjustments given here net sale consists of 911 thousand dollars 33 thousand dollars of sales return and allowances of 28 ,000 the revenue consists of sales discount is 18 ,000 and revenue is 4 ,000 selling expenses is 80 ,000 depreciation equipment is 10 ,000 advertising is 13 ,000 commission is 6 ,000 on december 21st 3 ,000 commission has been earned from sale persons administrative expenses consist of office salary 47 ,000 dividends 18 ,000 utilities 12 ,000 interest expenses 2 ,000 rent expenses 24 ,000 including repayments totaling of 6 ,000.
01:04
So here some instruction given in the question multiple step has to be shown for income statement.
01:09
So let us start solving the income statement for simon company simon company income statement for the year 31st december 2017.
01:37
So the format will be particulars amount amount.
01:46
So first item comes to sales revenue sales revenue will be 911 thousand dollars less sales return allowance that is 28 ,000 dollars less sales discount 18 ,000 which is 46 ,000 dollars net sales will be net sales comes to 8 ,000 ,650 ,000 dollars.
02:38
So gross profit will be so before gross profit.
02:48
We need to deduct cost of goods sold cost of goods sold as 555 ,000 dollars.
03:04
So when we deduct this we get gross profit gross profit is 310 ,000 dollars...