Question

Problem 4-04 (Part Level Submission)

The following account balances were included in the trial balance of Sheridan Corporation at June 30, 2020.

Sales revenue		$1,595,060		Depreciation expense (office furniture and equipment)		$7,879
Sales discounts		31,950		Property tax expense		7,245
Cost of goods sold		902,000		Bad debt expense (selling)		5,241
Salaries and wages expense (sales)		57,640		Maintenance and repairs expense (administration)		8,605
Sales commissions		99,290		Office expense		5,490
Travel expense (salespersons)		35,300		Sales returns and allowances		57,733
Delivery expense		21,900		Dividends received		41,600
Entertainment expense		15,100		Interest expense		17,830
Telephone and Internet expense (sales)		9,220		Income tax expense		92,040
Depreciation expense (sales equipment)		5,345		Depreciation understatement due to error—2017 (net of tax)		17,126
Maintenance and repairs expense (sales)		6,774		Dividends declared on preferred stock		8,150
Miscellaneous selling expenses		4,879		Dividends declared on common stock		40,330
Office supplies used		3,250
Telephone and Internet expense (administration)		2,735

The Retained Earnings account had a balance of $352,440 at July 1, 2019. There are 73,980 shares of common stock outstanding.

Using the multiple-step form, prepare an income statement for the year ended June 30, 2020. (Round earnings per share to 2 decimal places, e.g. 1.48.)

Answer 1

Sheridan corporation multi step form income statement For the year ended June 30 2020 5 sales revenue 1595062 7 Less : Sales discounts 31950 57733 89683 1505379 902000 603379 8 Sales retunrns and allowances 9 Net Sales 10 Cost of goods sold 11 Gross profit 12 Operating Expenses 13 Selling expenses 14 Sales commissions 15 Salaries and wages exp 16 Travel expense 17 Delivery Expense 18 Entertainment expense 19 Telephone and Internet expense 20 Maintenance and repairs expense 21 Depreciation expense 22 Bad debt expense 23 Misc selling expenses 99290 57640 35300 21900 15100 9220 6774 5345 5241 4879 260689 24

25 Administrative Expenses 26 Maintenance and repairs expense 27 Property expenses 28 Office supplies used 29 Telephone and Internet expense 30 Depreciation expense 31 Office Expense 8605 7245 3250 2735 7879 5490 35204 Total opertaing expenses 295893 35 Operating Income 307486 41600 37 Other Revenues and Gains 38 Dividends Received 39 Other Expenses and Losses 40 Interest Expense 41 Income Before Income Tax 42 (-)Income Tax Expense 43 Net Income 17830 331256 -92040 239216 45 Earnings per common shares 3.12

B Sheridan corporation multi step form income statement For the year ended June 30 2020 1595062 5 sales revenue 6 7 Less : Sales discounts 31950 57733 I=B7+B8 =C5-C8 902000 =C9-C10 8 Sales retunrns and allowances 9 Net Sales 10 Cost of goods sold 11 Gross profit 12 Operating Expenses 13 Selling expenses 14 Sales commissions 15 Salaries and wages exp 16 Travel expense 17 Delivery Expense 18 Entertainment expense 19 Telephone and Internet expense 20 Maintenance and repairs expense 21 Depreciation expense 22 Bad debt expense 23 Misc selling expenses 24 99290 57640 35300 21900 15100 9220 6774 5345 5241 4879 Es =SUM(B14:B23)

25 Administrative Expenses 26 Maintenance and repairs expense 27 Property expenses 28 Office supplies used 29 Telephone and Internet expense 30 Depreciation expense Office Expense 8605 7245 3250 2735 7879 5490 =SUM(B26:B31) Total opertaing expenses =C23+C31 Operating Income =C11-C33 41600 37 Other Revenues and Gains 38 Dividends Received 39 Other Expenses and Losses 40 Interest Expense 41 Income Before Income Tax 42 - Income Tax Expense 43 Net Income 17830 =C35+C38-C40 -92040 =C41+C42 45 Earnings per common shares =(239216-8150)/73980 16