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Psymon Company, Inc., sells construction equipment. The annual fiscal period ends on December 31. The following...

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Accounting

Psymon Company, Inc., sells construction equipment. The annualfiscal period ends on December 31. The following adjusted trialbalance was created from the general ledger accounts on December31: Account Titles Debits Credits Cash $ 42,000 Accounts Receivable18,000 Inventory 65,000 Property and Equipment 50,000 AccumulatedDepreciation $ 21,000 Accounts Payable 30,000 Common Stock 90,000Retained Earnings, January 1 11,600 Sales Revenue 167,000 Cost ofGoods Sold 98,000 Salaries and Wages Expense 17,000 Office Expenses18,000 Interest Expense 2,000 Income Tax Expense 9,600 Totals $319,600 $ 319,600

  1. Prepare a multistep income statement that would be used forexternal reporting purposes. TIP: Some of the accounts listed willappear on the balance sheet rather than the income statement.

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Psymon Company, Inc.
Income Statement
For the year ended Dec 31,
Sales Revenue $ 167,000.00
Cost of Goods Sold              98,000
Gross Profit              69,000
Operating Expenses
Salaries and Wages              17,000
Office Expenses              18,000
Total Operating Expenses              35,000
Operating Income              34,000
Interest Expense                 2,000
Profit before Taxes              32,000
Tax Expense                 9,600
Net Income              22,400

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