Question

You have been provided with the following selected accounts for Monty Ltd. for the year ended April 30, 2018:

Inventory, May 1, 2017		$578,000		Interest expense		$28,000
Purchases		5,853,000		Interest income		20,000
Accounts receivable		757,000		Accounts payable		589,000
Sales		9,378,000		Administrative expenses		800,000
Purchase discounts		36,000		Selling expenses		141,000
Freight in		117,000		Cash		166,000
Land		919,000		Common shares		195,000
Sales returns and allowances		236,000

Monty conducted a physical inventory count on April 30, 2018. Inventory on hand at that date was determined to be $724,000.

Prepare a partial multiple-step income statement for the year ended April 30, 2018, through to gross profit.

Question 10 You have been provided with the following selected accounts for Monty Ltd. for the year ended April 30, 2018: Inventory, May 1, 2017 $578,000 Interest expense $28,000 Purchases 5,853,000 Interest income 20,000 Accounts receivable 757,000 Accounts payable 589,000 Sales 9,378,000 Administrative expenses 800,000 36,000 Selling expenses Purchase discounts 141,000 Freight in 117,000 Cash 166,000 Land 919,000 Common shares 195,000 Sales returns and allowances 236,000 Monty conducted a physical inventory count on April 30, 2018. Inventory on hand at that date was determined to be $724,000

Answer 1

Answer-

MONTY LTD.
INCOME STATEMENT
FOR THE YEAR ENDED APRIL 30,2018
PARTICULARS	AMOUNT	AMOUNT	AMOUNT
	$	$	$
Sales Revenue
Gross sales			9378000
Less- Sales returns & allowances			236000
Net Sales			9142000
Less- Cost of goods sold
Opening inventory		578000
Add- Purchases	5853000
Less- Purchase discounts	36000
Net Purchases	5817000
Add-Freight-In	117000
Cost of goods purchased		5934000
Cost of goods available for sale		6512000
Less- Ending inventory		724000
Cost of goods sold			5788000
Gross profit			3354000
Less- Operating expenses
Administrtaive expenses		800000
Selling expenses		141000
Total operating expenses			941000
Operating income			2413000
Less- Other expenses
Interest expense		28000
Less-Interest income		20000	8000
Income before income taxes			2405000