FAIRHAVEN INC.
Income Statement
For Year Ended June 30, 2017
Sales
$1,059,000
Cost of goods sold
648,000
Gross profit
411,000
Operating expenses
Depreciation expense
$ 89,000
Other expenses
105,000
Total operating expenses
194,000
Other gains (losses)
217,000
Gain on sale of equipment
7,300
Income before taxes
224,300
Income taxes expense
68,660
Net income
$ 155,640
Additional Information
a. A $43,000 note payable is retired at its $43,000 carrying (book) value in exchange for cash.
b. The only changes affecting retained earnings are net income and cash dividends paid.
c. New equipment is acquired for $87,000 cash.
d. Received cash for the sale of equipment that had cost $72,000, yielding a $7,300 gain.
e. Prepaid Expenses and Wages Payable relate to Other Expenses on the income statement.
f. All purchases and sales of inventory are on credit.
Requirement
General
Journal
General
Ledner
Trial Balance Direct Method
Indirect
Method
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