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 materiala, 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 $ 27,600 Direct labor 7.500 Income tax expense 9.600 Indirect labor 37,100 Miscellaneous production costs 140,600 office salaries expense 7.500 raw materials purchases 42,000 Rent expense-Office space Rent expense-Selling space 158.500 Rent expense Factory building 184,000 Maintenance expense Factory equipment 17.000 Sales 21,500 Sales salaries expense 166.600 137,300 $ 676,700 243,300 55.900 11, 100 72.000 1,000,000 24,000 26, 100 82.900 35,200 4,616,000 395,400 2. Prepare the company's 2017 Income statement that reports separate categories for (a) selling expenses and (b) general and administrative expenses.

Answer 1

LEONE COMPANY Income Statement For Year Ended December 31, 2017 Sales Cost of goods sold Cost of goods manufactured Add: Finished goods, December 31, 2016 4616000 2059000 166600 2225600 137300 Goods available for sale Less: Finished goods, December 31, 2017 Cost of goods sold Gross Profit from sale 2088300 2527700

Operating Expenses: Selling expense Depreciation Expense - Selling equipment Rent expense - Selling space Sales Salaries expense Advertising expense 9600 26100 395400 27600 458700 Total selling Expense General and administrative expenses: Depreciation expense - Office equipment Office salaries expense Rent expense - Office space 7500 72000 24000 Total general and administrative expenses Total operating expenses Income before taxes Income taxes expense Net Income 103500 5622001 1965500 243300 17222001