Question 5 The accountant of Pearl Shoe Co. has compiled the following informati

Question

Question 5 The accountant of Pearl Shoe Co. has compiled the following information from the company's records as a basis for an income statement for the year ended December 31, 2017. Rent revenue Interest expense Market appreciation on land above cost Salaries and wages expense (selling) Supplies expense (selling) Income tax Salaries and wages expense (administrative) . Other administrative expenses Cost of goods sold Net sales Depreciation on plant assets ( 70% selling, 30% administrative) Cash dividends declared $30,100 19,100 32,100 115,900 18,700 38,500 137,000 52,800 497,100 981,100 66,100 17,100 There were 21,270 shares of common stock outstanding during the year

Explanation / Answer

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Formula Net Sales 9,81,100 Less Cost of goods sold 4,97,100 Gross Profit 4,84,000 '=F5-F6 Operating Expenses Salaries and Wages 1,15,900 Selling Expenses 18,700 Depreciation Expenses 46270 1,80,870 '=E9+E10+E11 Administrative Expenses Salaries and Wages 137000 Other Expenses 52,800 Depreciation Expenses 19830 2,09,630 '=E17+E16+E15 Other Revenue and Gains Rent Income 30,100 30,100 Other Expenses Interest 19,100 19,100 Income before income taxes 1,04,500 '=F7-F11-F17+F20-F23 Taxes 38500 Net Income 66,000 '=F25-F27 Dividend Paid 17,100 Transfer to reserve and surplus 48,900 '=F28-F29 No. of shares 21270 EPS 2.29901 =f30/f31

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