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Chapter 3: E3-13_a (page 134)

E3-13 (Lo5,6) (Closing Entries) The adjusted trial balance of Lopez Company shows the following data pertaining to sales at the end of its fiscal year, October 31, 2017: Sales Revenue \(800,000, Delivery Expenses \)12,000, Sales Returns and Allowances \(24,000 and Sales Discounts \)15,000.

Instructions:

(a) Prepare the revenues section of the income statement.

Short Answer

Expert verified

The amount of net income is $761,000.

Step by step solution

01

Meaning of Income Statement

An income statement is a financial report showing a company’s performance over some time bysubtracting expenses from revenue to obtain net income. It is also called a Profit and loss statement or Earning report.

02

Revenue section of the income statement:

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Most popular questions from this chapter

(LO5) (Closing Entries) Presented below is information related to Gonzales Corporation for the month of January 2017.

Cost of Goods sold \( 208,000 Salaries and wages expenses \)61,000

Delivery expenses \( 7,000 Sales discounts \) 8,000

Insurance expenses \( 12,000 Sales returns and allowances \)13,000

Rent expenses \( 20,000 Sales revenue \)350,000

Instructions:

Prepare the necessary closing entries.

Question: E3-16 (L05) (Closing Entries for a Corporation) Presented below are selected account balances for Homer Winslow Co. as of December 31, 2017.

Inventory 12/31/17 \(60,000 Cost of Goods Sold \)225,700

Common Stock \(75,000 Selling Expenses \)16,000

Retained Earnings \(45,000 Administrative Expenses \)38,000

Dividends \(18,000 Income Tax Expenses \)30,000

Sales Returns and

Allowances \(12,000

Sales Discounts \)15,000

Sales Revenue $410,000

Instructions:

Prepare closing entries for Homer Winslow Co. on December 31,2017. (Omit explanations)

BE3-11 (L04) Side Kicks has year-end account balances of Sales Revenue \(808,900, Interest Revenue \)13,500, Cost of Goods Sold \(556,200, Administrative Expenses \)189,000, Income Tax Expense \(35,100, and Dividends \)18,900. Prepare the year-end closing entries

Midwest Enterprises made the following entry on December 31, 2017.

Interest Expense 10,000

Interest Payable 10,000

(To record interest expensedue on loan from Anaheim

National Bank)

What entry would Anaheim National Bank make regarding its outstanding loan to Midwest Enterprises? Explain why this must be the case.

Agazzi Repair Shop had the following transactions during the first month of business as a proprietorship. Journalize the transactions. (Omit explanations.) Aug. 2 Invested \(12,000 cash and \)2,500 of equipment in the business. 7 Purchased supplies on account for \(500. (Debit asset account.) 12 Performed services for clients, for which \)1,300 was collected in cash and \(670 was billed to the clients. 15 Paid August rent \)600. 19 Counted supplies and determined that only $270 of the supplies purchased on August 7 are still on hand.
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