Question

Slapshot Company makes ice hockey sticks and sold 1,890 sticks during the month of June at a total cost of $378,000. Each stick sold at a price of $360. Slapshot also incurred two types of selling costs: commissions equal to 10% of the sales price and other selling expense of $64,700. Administrative expense totaled $53,800.

Required:
Prepare an income statement for Slapshot for the month of June

Answer 1

The income statement for Slapshot Company for June shows that the company had a sales revenue of $680,400 and a cost of goods sold of $378,000. After deducting selling costs, other selling expenses, and administrative expenses from the gross profit, the company had an operating income of $116,220 for the month.

Step-by-step explanation:

Income Statement for Slapshot Company for June:

1. Sales Revenue: $360 × 1,890 = $680,400
2. Cost of Goods Sold: $378,000
3. Gross Profit: $680,400 - $378,000 = $302,400
4. Selling Costs: ($360 × 1,890) × 0.10 = $67,680
5. Other Selling Expense: $64,700
6. Administrative Expense: $53,800
7. Operating Income: $302,400 - $67,680 - $64,700 - $53,800 = $116,220

The income statement for Slapshot Company for June shows that the company had a sales revenue of $680,400 and a cost of goods sold of $378,000. After deducting selling costs, other selling expenses, and administrative expenses from the gross profit, the company had an operating income of $116,220 for the month.