Question

JRCES 4 1 Study Problem 4-04 (Part Level Submission) The following account balances were included in the trial balance of Swifty Corporation at June 30, 2020. Sales revenue $1,590,740 Depreciation expense (office furniture and equipment) $6,648 Sales discounts 32,570 Property tax expense 7,291 Cost of goods sold 899,700 Bad debt expense (selling) 4,393 Salaries and wages expense (sales) 57,350 Maintenance and repairs expense (administration) 9,659 Sales commissions 98,130 Office expense 5,460 Travel expense (salespersons) 34,600 Sales returns and allowances 68,403 Delivery expense 22,690 Dividends received 39,210 Entertainment expense 14,980 Interest expense 19,510 Telephone and Internet expense (sales) 9,100 Income tax expense 94,670 Depreciation expense (sales equipment) 5,289 Depreciation understatement due to error-2017 (net of tax) 16,437 Maintenance and repairs expense (sales) 5,707 Dividends declared on preferred stock 9,300 Miscellaneous selling expenses 4,898 Dividends declared on common stock 39,450 Office supplies used 3,373 Telephone and Internet expense (administration) 2,560 The Retained Earnings account had a balance of $361,900 at July 1, 2019. There are 78,560 shares of common stock outstanding. (al) Using the multiple-step form, prepare an income statement for the year ended June 30, 2020. (Round earnings per share to 2 decimal places, e.g. 1.48.) SWIFTY CORPORATION Income Statement For the Year Ended June 30, 2020 Sales Sales Revenue Less Sales Discounts $

Answer 1

SWIFTY CORPORATION
Income Statement
For the year ended June 30,2020
Sales:
Sales revenue		$1,590,740
Less:
Sales discounts	$32,570
Sales returns and allowances	$68,403
		$100,973
Net sales		$1,489,767
Less: Cost of goods sold		$899,700
Gross profit		$590,067
Less: Operating expenses
Selling expenses:
Salries and wages expense	$57,350
Sales commissions	$98,130
Travel expense	$34,600
Delivery expense	$22,690
Entertainement expense	$14,980
Telephone and internet expense	$9,100
Depreciation expense	$5,289
Maintenance and repairs expense	$5,707
Miscellaneous selling expenses	$4,898
Bad debt expense	$4,393
Total selling expenses	$257,137
Office and administrative expenses:
Office supplies expense	$3,373
Telephone and internet expense	$2,560
Depreciation expense	$6,648
Property taxe expense	$7,291
Maintenance and reparis expense	$9,659
Office expense	$5,460
Total office and administrative expenses	$34,991
Total operating expenses		$292,128
Operating income		$297,939
Non-Opearating income(expense):
Add: Dividend revenue		$39,210
Less: Interest expense		($19,510)
Income before income tax		$317,639
Less: Income tax expense		$94,670
Net income		$222,969
Earning per share		$2.72

*Earning per share = ($222,969 net income - 9,300 preferred dividned)/ 78,560 Common shares = $2.72