An inexperienced accountant prepared this condensed income statement for Crane Company, a retail firm that has...
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An inexperienced accountant prepared this condensed income statement for Crane Company, a retail firm that has been in business for a number of years. Crane Company Income Statement For the Year Ended Decemer 31, 2022 Revenues Net sales $1,071,000 Other revenues 27,720 1,098,720 Cost of goods sold 699,300 Gross profit 399,420 Operating expenses Selling expenses 137,340 Selling expenses 137,340 Administrative expenses 129,780 267,120 Net earnings $132,300 As an experienced, knowledgeable accountant, you review the statement and determine the following facts. 1. Net sales consist of sales $1,147,860, less freight-out on merchandise sold $41,580, and sales returns and allowances $35,280. 2. Other revenues consist of sales discounts $22,680 and rent revenue $5,040. 3. Selling expenses consist of salespersons' salaries $100,800, depreciation on equipment $12,600, advertising $16,380, and sales commissions $7,560. The commissions represent commissions paid. At December 31, $3,780 of commissions have been earned by salespersons but have not been paid. All compensation should be recorded as Salaries and Wages Expense. Administrative expenses consist of office salaries $59,220, dividends $22,680, utilities $15,120, interest expense $2,520, and rent expense $30,240, which includes prepayments totaling $7,560 for the first quarter of 2018. 4. Prepare a correct detailed multiple-step income statement. Assume a 25% tax rate. (List other revenues before other expenses. Round answers to O decimal places, eg. 5,125. Enter negative amounts using either a negative sign preceding the number eg -45 or parentheses eg. (45) CRANE COMPANY Income Statement For the Year Ended December 31, 2022 For the Month Ended December 31, 2022 December 31, 2022 An inexperienced accountant prepared this condensed income statement for Crane Company, a retail firm that has been in business for a number of years. Crane Company Income Statement For the Year Ended Decemer 31, 2022 Revenues Net sales $1,071,000 Other revenues 27,720 1,098,720 Cost of goods sold 699,300 Gross profit 399,420 Operating expenses Selling expenses 137,340 Selling expenses 137,340 Administrative expenses 129,780 267,120 Net earnings $132,300 As an experienced, knowledgeable accountant, you review the statement and determine the following facts. 1. Net sales consist of sales $1,147,860, less freight-out on merchandise sold $41,580, and sales returns and allowances $35,280. 2. Other revenues consist of sales discounts $22,680 and rent revenue $5,040. 3. Selling expenses consist of salespersons' salaries $100,800, depreciation on equipment $12,600, advertising $16,380, and sales commissions $7,560. The commissions represent commissions paid. At December 31, $3,780 of commissions have been earned by salespersons but have not been paid. All compensation should be recorded as Salaries and Wages Expense. Administrative expenses consist of office salaries $59,220, dividends $22,680, utilities $15,120, interest expense $2,520, and rent expense $30,240, which includes prepayments totaling $7,560 for the first quarter of 2018. 4. Prepare a correct detailed multiple-step income statement. Assume a 25% tax rate. (List other revenues before other expenses. Round answers to O decimal places, eg. 5,125. Enter negative amounts using either a negative sign preceding the number eg -45 or parentheses eg. (45) CRANE COMPANY Income Statement For the Year Ended December 31, 2022 For the Month Ended December 31, 2022 December 31, 2022
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Answer rating: 100% (QA)
1 The 1st statement consist of Net sales sales freightout sales returnallowances Its a wrong statement because freightout on merchandise sold is not i... View the full answer
Related Book For
Accounting Business Reporting for Decision Making
ISBN: 9780730302414
4th edition
Authors: Jacqueline Birt, Keryn Chalmers, Albie Brooks, Suzanne Byrne, Judy Oliver
Posted Date:
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