Question

1. prepare a multiple-step income statement for the year.

Problem 3-04 The trial balance of Kingbird Fashion Center contained the following accounts at November 30, the end of the company's fiscal year. Credit KINGBIRD FASHION CENTER TRIAL BALANCE NOVEMBER 30, 2020 Debit Cash $33,600 Accounts Receivable 37,300 Inventory 48,600 Supplies 9,100 Equipment 140,200 Accumulated Depreciation Equipment Notes Payable Accounts Payable Common Stock Retained Eamings Sales Revenue Sales Returns and Allowances 4,200 Cost of Goods Sold 495,400 Salaries and Wages Expense 138,200 Advertising Expense 27,700 Utilities Expenses 15,800 Maintenance and Repairs Expense 12,100 Delivery Expense 16,700 Rent Expense 25,300 Totals $1,004,200 $26,600 54,600 52,100 93,600 11,600 765,700 $1,004,200

Answer 1

KINGBIRD FASHION CENTER
Income Statement
For the Year Ended November 30, 2020
Sales revenue
Sales Revenue			$765,700
Less: Sales Returns and Allowances			$4,200
Net Sales			$761,500
Cost of Goods Sold			$495,400
Gross Profit        [Net Sales - Cost of Goods sold]			$266,100
Operating Expenses:
Selling expenses:
Salaries and Wages Expense           [70% of total = $138,200 x 70%]	$96,740
Advertising Expense	$27,700
Utilities Expense                             [80% of total = $15,800 x 80%]	$12,640
Delivery expense	$16,700
Rent Expense                                   [80% of total = $25,300 x 80%]	$20,240
Depreciation expense                       [Refer 2nd point in additional adjustment data]	$16,950
Supplies expense                              [Beginning supplies inventory - Ending supplies inventory = $9,100 - $5,100]	$4,000
Total selling expenses		$194,970
Administrative expenses:
Salaries and Wages Expense           [30% of total = $138,200 x 30%]	$41,460
Maintenance and Repairs Expense	$12,100
Utilities Expense                             [20% of total = $15,800 x 20%]	$3,160
Rent Expense                                   [20% of total = $25,300 x 20%]	$5,060
Total administrative expenses		$61,780
Total operating expenses       [$194,970 + $61,780]			$256,750
Income from operations                  [$266,100 - $256,750]			$9,350
Other expenses and Losses
Interest expense                           [Refer 3nd point in additional adjustment data]			$10,090
Net Income / (Loss)             [$9,350 - $10,090]			($740)