Re-organize the scrambled accounts into the income statement forPet Land Inc., a pet food and accessories retailer in a smallCanadian town.
You will have to calculate Sales Revenue, Cost of Goods Sold,the amount of tax that was paid, the totals for the sections of thestatement and determine Gross Margin, Operating Margin, IncomeBefore Tax and Net Income.
Compile Sales Revenue from Gross Sales Revenue and record it onthe statement.
Compile the Cost of Goods Sold from the appropriate accounts andadd it to the statement. Calculate the Gross Margin and record iton the statement.
List the Operating Expenses on the statement and total it.Calculate the Operating Margin and record it on the statement.
List the Non-operating Expenses on the statement, calculate andrecord Income Before Tax, calculate and record Taxes and calculateand record Net Income.
| |
Cleaning & Maintenance | 5,000 |
Office Supplies | 2,000 |
Discounts | 12,300 |
Fixed Utilities (telephone, heat, hydro) | 2,000 |
Purchases | 256,750 |
Depreciation | 15,000 |
Beginning Inventory | 42,500 |
Taxes @ 34% | You calculate |
Gross Sales Revenue | 697,200 |
Closing Inventory | 33,250 |
Returns | 19,900 |
Salaries | 176,000 |
Interest Expense | 7,000 |
Advertising & Promotion | 25,000 |
Ending Inventory | 33,250 |