Question

The Income Statement columns of the August 31 (year-end) work sheet for Ralley Company are shown here. To save time and space, the expenses have been grouped together into two categories.

	INCOME STATEMENT
ACCOUNT NAME	DEBIT	CREDIT
Income Summary	32,000.00	31,000.00
Sales		324,000.00
Sales Returns and Allowances	13,310.00
Sales Discounts	7,700.00
Purchases	126,360.00
Purchases Returns and Allowances		1,200.00
Purchases Discounts		1,300.00
Freight In	7,500.00
Selling Expenses	61,560.00
General Expenses	50,884.00
	299,314.00	357,500.00
Net Income	58,186.00
	357,500.00	357,500.00

From the information given, prepare an income statement for the company.

Ralley Company
Income Statement
For Year Ended August 31, 20--
Revenue from Sales:
			$
		$
Net Sales				$
Cost of Goods Sold:
			$
		$
	$
Net Purchases		$
			$
				$
Operating Expenses:
			$
Total Operating Expenses
Net Income				$

Answer 1

Income Statement of the company is as follows-

	Ralley Company
	Income Statement
	Fir the Year Ending August 31, 20##
		Amounts in $	Amounts in $
	Revenue from Sales	3,24,000
Less	Sales Returns and allowances	13,310
	Net sales		3,10,690
	Cost of Goods Sold
	Purchases	1,26,360
Less	Purchase returns	1,200
Less	Purchase dscounts	1,300
	Net Purchases		-1,23,860
	Operating Expenses
	Sales Discount	7,700
Add	Freight Inwards	7,500
Add	General Expenses	50,884
	Total Operating Expenses		-66,084
	Selling and Admin Expenses
	Selling Expenses	61,560
	Total Selling & Admin Expenses		-61,560
	Other Income	31,000
Less	Other Expenses	32,000
	Net Other Income		-1,000
	Net Income	Total	58,186