Question

Accounts Payable Cost of Goods Sold Gain on Sale of Equipment General and Admin Expense Loss from Discontinued Ope Salaries Payable Тах Expense $45,000 230,000 15,000 160,000 10,500 20,000 60,000 Blanton is preparing their multi-step income statement and have downloaded their income statement accounts. Two accounts were downloaded incorrectly and do not belong on the income statement (HINT: you have to identify the wrong accounts). These two replace the wrong accounts shown above: Selling Expenses 10,000 Sales Revenue 587,000 What is Blanton Co's income before taxes and discontinued operations for the period? Enter your response as a whole number, no commas and no dollar sign.

Answer 1

Solution

Two wrong accounts are Salaries payable and Accounts payable.

Salaries payable and accounts payable are not income statement account but balance sheet accounts.

Income before taxes and discontinued operations

$    202,000.00

Working

Sales revenue	$    587,000.00
Cost of goods sold	$ (230,000.00)
Gross profit	$    357,000.00
Less: General and admin expenses	$ (160,000.00)
Less: Selling expenses	$    (10,000.00)
Add: Gain on sale of Equipment	$      15,000.00
Income before taxes and discontinued operations	$    202,000.00