Question

Required information [The following information applies to the questions displayed below.) The following calendar year-end information is taken from the December 31, 2017, adjusted trial balance and other records of Leone Company $ Advertising expense Depreciation expense-Office equipment Depreciation expense-Selling equipment Depreciation expense-Factory equipment Factory supervision Factory supplies used Factory utilities Inventories Raw materials, December 31, 2016 Raw materials, December 31, 2017 Work in process, December 31, 2016 Work in process, December 31, 2017 Finished goods, December 31, 2016 Finished goods, December 31, 2017 $ 26,100 Direct labor 11,000 Income taxes expense 10,300 Indirect labor 35,389 Miscellaneous production costs 119,900 office salaries expense 9.709 Row materials purchases 40,000 Rent expense-office space Rent expense-Selling space 164,200 Rent expense-Factory building 175,000 Maintenance expense-Factory equipment 19.100 Sales 24,000 Sales salaries expense 168,700 147,600 685,600 288,700 59,100 10,500 61,000 928,000 27,000 27,700 82,200 38,700 4,615,7001 394,300 2. Prepare the company's 2017 income statement that reports separate categories for (a) selling expenses and (b) general and administrative expenses LEONE COMPANY Income Statement For Year Ended December 31, 2017

Answer 1

   INCOME STATEMENT OF LEONE COMPANY FOR THE YEAR ENDED DECEMBER 31,2017

Particular	amount ($)	amount($)	amount ($)
Sales			4615700
Less cost of goods sold
Beginning finished goods inventory		168700
Add cost of goods manufactured
Direct material
Beginning Raw material inventory	164200
Add purchase of Raw material	928000
RAW MATERIAL available for production	1092200
less.ending Raw material inventory	(175000)
RAW MATERIAL transferred to production	917200
Direct labour	685600
Depreciation expenses factory equipment	35300
Factory supervision	119900
Factory supplies	9700
Factory utilities	40000
Indirect labour	59100
Miscellaneous production cost	10500
Rent expenses factory building	82200
Maintenance expenses factory equipment	38700
Beginning work in process	19100
Less ending work in process	(24000)
Cost of goods manufactured		1993300
Less ending finished goods		(142600)
Cost of goods sold			(1850700)
Gross MARGIN			2765000
Selling expenses
Advertising expenses		26100
Depreciation expenses selling equipment		10300
Rent expenses selling space		27700
Sales salaries expenses		394300
Total selling expenses			(458400)
Administrative expenses
Depreciation expenses office equipment		11000
Office salary expenses		61000
Rent expenses office space		27000
Total administrative expenses			(99000)
Income before income tax			2207600
Less income tax expenses			(288700)
NET INCOME			1918900

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