Question

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Exercise 5-06 a-b The adjusted trial balance of Tsai Company shows the following data pertaining to sales at the end of its fiscal year October 31, 2020: Sales Revenue $820,000, Freight-Out $16,000, Sales Returns and Allowances $25,000, and Sales Discounts $13,000. Prepare the sales section of the income statement. Tsai Company Income Statement (Partial)

Answer 1

Answer

• Income Statement

Income Statement - Partial
for the year ended 31 Oct 2020
Revenue/Sales:
Sales revenue		$820,000
Less:
Sales return & Allowances	$25,000
Sales Discounts	$13,000
		$38,000
Net Sales		$782,000

• Closing entries

Date	Accounts title	Debit	Credit
Oct-31	Sales revenue	$820,000
	Income Summary		$820,000
	(to close sales revenue)
Oct-31	Income Summary	$38,000
	Sales return & Allowances		$25,000
	Sales discount		$13,000
	(to close contra accounts)