Question

The following are selected ledger accounts of Concord Corporation at December 31, 2020. Cash $181,300 Inventory 524,300 Sales revenue 4,189,500 Unearned sales revenue 114,660 Purchases 2,730,280 Sales discounts 33,320 Purchase discounts 26,460 Selling expenses 67,620 Accounting and legal services 32,340 23,520 Insurance expense (office) Advertising expense 52,920 Delivery expense 91,140 Depreciation expense (office equipment) 47,040 35,280 Depreciation expense (sales equipment) Salaries and wages expense (sales) Salaries and wages expense (office) Purchase returns Sales returns and allowances Freight-in Accounts receivable Sales commissions Telephone and Internet expense (sales) Utilities expense (office) Miscellaneous office expenses Rent revenue Casualty loss (before tax) Interest expense Common stock ($10 par) $278,320 339,080 14,700 77,420 70,560 139,650 81,340 16,660 31,360 7,840 235,200 68,600 172,480 740,880 Concord's effective tax rate on all items is 20%. A physical inventory indicates that the ending inventory is $686,000. Prepare a condensed 2020 income statement for Concord Corporation. (Round earnings per share to 2 decimal places CONCORD CORPORATION Income Statement

Answer 1

Income Statement

Sales Revenue		$4,189,500
Less: Sales discount	$33,320
Sales returns & allowances	$77,420	($80,740)
Net sales		$4,108,760
Less: Cost of goods sold
Beginning inventory	$524,300
Purchases	$2,730,280
Freight-in	$70,560
Less: purchase discount	($26,460)
Purchase returns	($14,700)
Ending inventory	($686,000)	($2,597,980)
Gross profit		$1,510,780
Less: Operating expenses:
Selling expenses:
Salaries & wages (sales)	$278,320
Sales commission	$81,340
Selling expenses	$67,620
Telephone and internet expenses	$16,660
Delivery expenses	$91,140	($535,080)
Administrative expense:
Accounting for legal services	$32,340
Insurance expenses (office)	$25,520
Advertising expense	$52,920
Depreciation- Sales equipment	$35,280
Depreciation- office equipment	$47,040
Salaries &wages expenses (office)	$339,080
Utilities expenses (office)	$31,360
Miscellaneous office expenses	$7,840	($569,380)
Income from operations		$406,320
Add: Rent revenue		$235,200
		$641,520
Less: other expenses & Losses:
Extraordinary loss( before tax)		($68,600)
Interest expense		($172,480)
Income before tax		$400,440
Less: Tax @20%		($80,088)
Net income		$320,352

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