Question

Question 3 The accountant of Vaughn Shoe Co. has compiled the following information from the company's records as a basis for an income statement for the year ended December 31, 2020. Rent revenue $31,400 Interest expense 20,400 Market appreciation on land above cost 33,400 Salaries and wages expense (selling) 117,200 Supplies expense (selling) 20,000 Income tax 25,500 Salaries and wages expense (administrative) 138,300 Other administrative expenses 54,100 Cost of goods sold 498,400 Net sales 982,400 Depreciation on plant assets (70% selling, 30% administrative) 67,400 Cash dividends declared 18,400 There were 20,000 shares of common stock outstanding during the year.

Answer 1

Answer
Multiple - Step Income Statement:
Bridgeport Shoe Co.
Income Statement
For the year ended December 31, 2017
Net Sales			$      982,400
Cost of goods sold			$      498,400
Gross profit on sales			$      484,000
Operating Expenses:
Selling Expenses
Salaries and wages expense	$         117,200
Supplies expense	$           20,000
Depreciation on sale equipment ($67400 X 70%)	$           47,180	$      184,380
Administrative expenses
Salaries and wages expense	$         138,300
Depreciation on office of equipment ($67400 X 30%)	$           20,220
Other administrative expenses	$           54,100	$      212,620	$      397,000
Income from operations			$        87,000
Other Revenues and Gains
Rental Income			$        31,400
			$      118,400
Other expenses and losses
Interest expense			$        20,400
Income before income tax			$        98,000
Income tax			$        25,500
Net Income			$        72,500
Earnings per share ($72500 / 20000 outstanding shares)			3.625
				Single - Step Income Statement:
Bridgeport Shoe Co.
Income Statement
For the year ended December 31, 2017
Revenues
Net Sales	$         982,400
Rental Income	$           31,400
Total Revenue	$      1,013,800
Expenses:
Cost of goods sold	$         498,400
Selling Expenses	$         184,380
Administrative expenses	$         212,620
Interest expense	$           20,400
Total Expenses	$         915,800
Income before income tax	$           98,000
Income tax	$           25,500
Net Income	$           72,500
Earnings per share ($72500 / 20000 outstanding shares)	3.625