Question

Wolford Department Store is located in midtown Metropolis. During the past several years, net income has been declining because suburban shopping centers have been attracting business away from city areas. At the end of the company’s fiscal year on November 30, 2017, these accounts appeared in its adjusted trial balance.

Accounts Payable $34,304
Accounts Receivable 22,016
Accumulated Depreciation's Equipment 87,040
Cash 10,240
Common Stock 44,800
Cost of Goods Sold 786,304
Freight-Out 7,936
Equipment 200,960
Depreciation Expense 17,280
Dividends 15,360
Gain on Disposal of Plant Assets 2,560
Income Tax Expense 12,800
Insurance Expense 11,520
Interest Expense 6,400
Inventoryv 33,536
Notes Payable 55,680
Prepaid Insurance 7,680
Advertising Expense 42,880
Rent Expense 43,520
Retained Earnings 18,176
Salaries and Wages Expense 149,760
Sales Revenue 1,157,120
Salaries and Wages Payable 7,680
Sales Returns and Allowances 25,600
Utilities Expense 13,568

Additional data: Notes payable are due in 2021.

Required:
Prepare a multiple-step income statement. (List other revenues before other expenses.)

Answer 1

Wolford Department Store

Income Statement

For the year ended November 30. 2017

Sales Revenue

Total sales $1,157,120

Less Sales return $25,600

Net Sales Revenue $1,131,520

Less : Cost of goods sold $786,304

Gross Profit $345,216

Operating Expenses

Selling Expenses

Freight out $7,936

Advertising expenses $42,880

Administrative expenses

Depreciation Expenses $17,280

Salaries and wages Expenses $149,760

Rent Expenses $43,520

Utilities Expenses $13,568

Insurance Expenses $11,520

Total Operating Expenses $286,464

$58,752

Other Income and Expenses

Gain on disposal of equipment $2,560

Less: Interest Expenses $11,520

Net Other Income and Expenses -$8,960

Less: Income Tax Expenses $12,800

Net Income $36,992