Name Tutor Institution Date The Simon Company Income Statement Explanation An income statement report is an essential part of analysis to a company as it acts as one of the brief reports regarding the company's performance over a specific period. The financial results are assessed by capturing the summary of expenses revenues through operating and non-operating business activities during a specified accounting period. It is a report from which crucial and significant decisions are made regarding the performance of add the revenues $22000 that is $119000+$22000=$141000 as required. This is later subjected to the tax rate indicated as 25% and hence later transferred to the balance sheet. The tax deduction was given as 0.25*141000=$35250. To find now the final income we less this deduction that is $141000-$35250=$105750. This value is to be constituted in on the balance sheet. We can say that this company is among the good performing companies in a given economy from the calculations above. [...]
Purpose of Assignment The purpose of this assignment is to help you become familiar with the parts of the multiple‐step income statement. Assignment Steps Resources: Financial Accounting: Tools for Business Decision Making Scenario: An inexperienced accountant prepared this condensed income statement for Simon Company, a retail firm that has been in business for a number of years. SIMON COMPANY Income Statement For the Year Ended December 31, 2017 Revenues Net sales $850,000 Other revenues 22,000 872,000 Cost of goods sold 555,000 Gross profit 317,000 Operating expenses Selling expenses 109,000 Administrative expenses 103,000 212,000 Net earnings $105,000 As an experienced, knowledgeable accountant, you review the statement and determine the following facts: Net sales consist of: sales $911,000, less freight-out on merchandise sold $33,000, and sales returns and allowances $28,000. Other revenues consist of sales discounts $18,000 and rent revenue $4,000. Selling expenses consist of salespersons' salaries $80,000, depreciation on equipment $10,000, advertising $13,000, and sales commissions $6,000. The commissions represent commissions paid. At December 21, $3,000 of commissions have been earned by salespersons but have not been paid. All compensation should be recorded as Salaries and Wages Expense. Administrative expenses consist of office salaries $17,000, dividends $18,000, utilities $12,000, interest expense $2,000, and rent expense $24,000, which includes prepayments totaling $6,000 for the first quarter of 2018. Prepare a detailed multi-step income statement with a brief explanation of 700 words. Assume a 25% tax rate. Show your work on the Excel® spreadsheet and submit with your explanation.