Question

$3,300 2,700 12,800 89,700 Cost of Goods Sold, Income Statement, and Statement of Comprehensive Income Gaskin Company derives the following items from its adjusted trial balance as of December 31, 2019: Sales $142,000 Interest revenue Purchases returns 5,200 Purchases discounts taken Gain on sale of equipment (pretax) 3,800 Inventory, January 1, 2019 Freight-in 3,400 Purchases Selling expenses 15,600 Administrative expenses Unrealized increase in fair value of Loss from truck accident (pretax) 2,400 available-for-sale securities The following additional information is also available. 1. The December 31, 2019, ending inventory is $14,700. 2. During 2019, 4,200 shares of common stock were outstanding the entire year. 3. The income tax rate is 30% on all items of income. 24,200 6,500

Answer 1

Gaskin Company

Schedule1: Cost of good sold

For year ended December31,2019

lnventory1/1/2019		$12800
Purchase	89700
Add: Freight in	3400
Cost of purchases	93100
Less: Purchases return	5200
Less : Purchase discount taken:	2700
Net purchases		$85200
Cost of good available for sale		$98000
Less: Inventory 31/12/2019		14700
Cost of Good sold		$83300

Gaskin Company

Income statement(Single step)

For year ended December 31,2019

Revenues:
Sales	$142000
Interest revenue	3300
Gain on sale of equipment	3800
Total revenue		$149100
Expenses:
Cost of good sold	$83300
Selling expenses	15600
Administration expenses	24200
Loss from truck accidents	6500
Income tax expenses(see working note)	5850
Total expenses		$135450
Net Income		$13650

Working note

Income taxes expenses =30% of (149100 -83300-15600-24200-6500) =30% of $19500 =$5850

Gaskin Company

Income Statement (Multi step)

For year ended December31,2019

Sales		$142000
Cost of good sold		$83300
Gross Profit		$58700
Operating expenses
Selling expenses	15600
Administrative ecpenses	24200
total operating expenses		$39800
Operating Income		$18900
Others item:
Gain on sale of equipments	3800
Loss on truck accident	6500
Interest revenue	3300	600
Income before income taxes		19500
Income tax expenses(30% of 19500)		5850
Net Income		$13650

Gaskin Company

Statement of Comprehensive Income

For year ended December 31,2019

Net Income	$13650
other comprehensive income:
Unrealized increase in value of available for sale securities(Net of income taxes)	$2400
Comprehensive Income	$16050