Gloria J Company provided the following information for 2019. Purchases 5,250,000.00 Purchases returns and allowances 150,000.00 Rental income 250,000.00 Selling expenses: Freight out 175,000.00 Salesmen’s commission 650,000.00 Depreciation...

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Accounting

Gloria J Company provided the following information for2019.
Purchases
5,250,000.00
Purchases returns and allowances
150,000.00
Rental income
250,000.00
Selling expenses:
Freight out
175,000.00
Salesmen’s commission
650,000.00
Depreciation – store equipment
125,000.00
Merchandise inventory, January 1
1,000,000.00
Merchandise inventory, December 31
1,500,000.00
Sales
7,850,000.00
Sales returns and allowances
140,000.00
Sales discounts
10,000.00
Administrative expenses
Officers’ salaries
500,000.00
Depreciation – office equipment
300,000.00
Freight in
500,000.00
Income tax
250,000.00
Loss on sale of equipment
50,000.00
Purchase discounts
100,000.00
Dividend revenue
150,000.00
Loss on sale of investment
50,000.00
Required: Prepare an incomestatement using “functional method” for the year with supportingnotes
*Hint: don't miss out incometax

Answer & Explanation Solved by verified expert

4.4 Ratings (925 Votes)

Income statement using functional method is similar as normal income statement with the expenses depicting bifurcations in the line of distributionselling administration and other costs Income Statement Using Functional method Particulars Notes Amount Amount Net sales revenue 1 7700000 Cost See Answer

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Purchases	5,250,000.00
Purchases returns and allowances	150,000.00
Rental income	250,000.00
Selling expenses:
Freight out	175,000.00
Salesmen’s commission	650,000.00
Depreciation – store equipment	125,000.00
Merchandise inventory, January 1	1,000,000.00
Merchandise inventory, December 31	1,500,000.00
Sales	7,850,000.00
Sales returns and allowances	140,000.00
Sales discounts	10,000.00
Administrative expenses
Officers’ salaries	500,000.00
Depreciation – office equipment	300,000.00
Freight in	500,000.00
Income tax	250,000.00
Loss on sale of equipment	50,000.00
Purchase discounts	100,000.00
Dividend revenue	150,000.00
Loss on sale of investment	50,000.00