Question

Use the information below and prepare the Multi-Step Income Statement for Hot Place on August 31. Sales $1,200,000 Interest Revenue 15 Sales Discounts 15,000 Sales Returns and Allowances 35,000 Cost of Goods Sold 790,000 Delivery Expense 1,500 Sales Salaries Expense 110,000 Office Supplies Expense 4,400 Store Supplies Expense 725 Admin Salaries Expense Depreciation Expense - Store Trucks 500 Depreciation Expense - Office Equipment 550 Rent Expense - Selling 500 Rent Expense - Office 2,100 Interest Expense Office Insurance Expense 300 350

Answer 1

Ans.	HOT PLACE
	Income Statement
	For Month Ended December 31
	Particulars		Amount
	Sales Revenue	$1,200,000
	Less: Sales returns and allowances	-$35,000
	Less: Sales discounts	-$15,000
	Net sales revenue		$1,150,000
	Cost of goods sold		$790,000
	Gross margin		$360,000
	Less: Operating expenses:
	Selling expenses:
	Delivery expense	$1,500
	Rent expenses - Selling	$500
	Sales salaries expense	$110,000
	Store supplies expenses	$725
	Depreciation expenses - Store trucks	$500
	Total Selling Expenses (1)		$113,225
	General and Administrative expenses:
	Depreciation expenses - Office equipment	$550
	Office supplies expenses	$4,400
	Rent expenses - Office	$2,100
	Administrative salaries expense	$300
	Office insurance expenses	$350
	Total General and Administrative Expenses (2)		$7,700
	Total operating expenses (1 + 2)		$120,925
	Operating income (EBIT)		$239,075
	Other income (expenses) :
	Add: Interest revenue		$15
	Less: Interest expenses		-$5
	Net income		$239,085