i) Below is a partial listing of the adjusted account balances of Lama Storeat year-end on December 31, 2018.Accounts Receivable 19,000Cost of Goods Sold 245,000Selling Expenses (includes depreciation) 35,000Interest Expense 1,000Accumulated Depreciation—Buildings 10,000Sales Discounts 22,000Inventory 45,000Administrative Expenses (includes depreciation) 30,000Sales Revenue 350,000Accounts Payable 14,000Interest Revenue 800Cuea/ACD/EXM/JANUARY – APRIL 2019/ACCOUNTING AND FINANCE Page 3ISO 9001:2008 Certified by the Kenya Bureau of StandardsRequiredSelect the appropriate account balance and prepare an income statement forLama Store for the year ended December 31, 2018
Question
i) Below is a partial listing of the adjusted account balances of Lama Storeat year-end on December 31, 2018.Accounts Receivable 19,000Cost of Goods Sold 245,000Selling Expenses (includes depreciation) 35,000Interest Expense 1,000Accumulated Depreciation—Buildings 10,000Sales Discounts 22,000Inventory 45,000Administrative Expenses (includes depreciation) 30,000Sales Revenue 350,000Accounts Payable 14,000Interest Revenue 800Cuea/ACD/EXM/JANUARY – APRIL 2019/ACCOUNTING AND FINANCE Page 3ISO 9001:2008 Certified by the Kenya Bureau of StandardsRequiredSelect the appropriate account balance and prepare an income statement forLama Store for the year ended December 31, 2018
Solution
Sure, here is the income statement for Lama Store for the year ended December 31, 2018:
Lama Store Income Statement For the Year Ended December 31, 2018
Sales Revenue: 22,000 Net Sales: $328,000
Cost of Goods Sold: 83,000
Operating Expenses: Selling Expenses: 30,000 Total Operating Expenses: $65,000
Operating Income: $18,000
Other Income and Expenses: Interest Revenue: 1,000 Net Other Income and Expenses: -$200
Net Income: $17,800
Please note that this income statement does not take into account taxes, as no information was provided about tax rates or amounts. Also, the Accumulated Depreciation—Buildings and Accounts Receivable and Payable are not included in the income statement as they are balance sheet items, not income statement items.
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