SHOW ALL WORK Income Statement Preparation: Prepare an Income Statement, in prop

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Income Statement Preparation:

Prepare an Income Statement, in proper format, for 2015 for Johnson Medical (JM) from the following information:

Salaries                        $70,000

Insurance                            $700

Utilities                           $3,500

Gas/Auto                         $5,750

Office Supplies               $7,250

Revenue                      $175,000

Rent                            $12,000

Maintenance                $50,000

Calculate, define, and discuss the operating expenses, operating profit, and profit percentage.

Did JM have a good year? Why/Why not?

Explanation / Answer

1.Operating expenses are the costs associated with a company's main operating activities and which are reported on its income statement. For example, a retailer's main operating activities are the buying and selling of merchandise or goods. Therefore, its operating expenses will include: Cost of goods sold

2.operating profit:A profit from business operations (gross profit minus operating expenses) before deduction of interest and taxes.

Income Statement Preparation: A Revenue   B operating expenses: Salaries   $175,000 Insurance $700 Utilities $3,500 Gas/Auto $5,750 Office Supplies $7,250 Rent   $12,000 Maintenance $50,000 Total operating expenses: $79,200 Total Operating profit(A-B) $95,800

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