Prepare an income statement for the company
Income Statement
We are using the same company as in the first Module. However, you need to consider some additional information.
• One client indicated that they were interested in purchasing $42,500 worth of products, so the bookkeeper recorded the transaction. However, the client has not actually committed to the purchase.
• The bookkeeper already corrected the sales account. However, the bookkeeper may have made a mistake when computing cost of goods sold. She included total production costs for 2014 and did not adjust ending inventory for the $42,500 worth of units left at the end of the year. The amount of ending inventory was determined using a physical count.
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Nybrostrand Company |
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31-Dec-14 |
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Trial Balance (accounts in alphabetical order) |
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Debit |
Credit |
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| Accounts payable |
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$ 78,000 |
| Accounts receivable |
$ 36,500 |
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| Cash |
30,000 |
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| Common stock |
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10,000 |
| Depreciation expense |
24,350 |
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| Cost of goods sold |
307,000 |
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| Equipment (net of depreciation) |
415,000 |
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| Insurance |
1,400 |
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| Inventory |
34,000 |
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| Long-term debt |
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127,000 |
| Marketing |
4,500 |
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| Paid-in capital |
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50,000 |
| Property taxes |
16,900 |
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| Rent |
28,000 |
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| Retained earnings |
|
? |
| Revenues |
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586,000 |
| Salaries |
78,500 |
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| Utilities |
6,700 |
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| Total | 982,850 |
982,850 |
• SLP Assignment Expectations
• Prepare an income statement for the company in good format. Always include the name of the company and the period covered in the title. Don’t forget dollar signs where appropriate. You do not need to include the balance sheet. Consequently, you will not need all the accounts listed above. How does the income or loss compare to the original income statement? Explain the importance of the matching concept.
• The submission should be 2- to 4-pages and needs to include answers to all the questions listed above. Show computations, discuss the results, and include references in APA format.
