Question

Hi, I just need to see how the Income statement is done using these information:

Follow Table 8.2 on page 181 to develop an end of year Income Statement for OU Engineering Foundations, using the following data.

• The organization has retained earnings of $1,500,000 from the previous end of the year.
• Gross sales for the year were $5,000,000 with refunds of $200,000 and refunds of $50,000.
• Interest and income from off-site investments were $150,000.
• Loan payments were $250,000.
• Taxes are as in Problem 1, above.
• The cost of goods sold is $2,500,000.
• Depreciation on equipment is $250,000.
• Sales bonuses and expenses are $150,000.
• Administration costs are $500,000.
• The board of directors voted for a $3.00 per share dividend for the 250,000 shares.

Answer 1

Solution Income Statement Gross sale Guam $ 5,000,000 Less: Refunds ($200,000 + ) $ 250,000 $50,000 Loppises ou Net sales $4,750,000 ooo tess! Cost of goods sold $2,500,000 Crooss Profit from b$2,250,000 i Sales Less! operating expenses! Depreciation $250,000 → Bonuses and $ 150,000 Expenses Admin. expense $500,000 operating profit Interest and Incomes from off-site Net Income before tax $900,000 $1,350,000 Addi $ 150,000 1,500,000 Jess! Income fan Net Income after tax