Question

The following data for the current year ended June 30 are from the accounting records of Zanadu Co.:
Administrative expenses $28,750
Cost of goods sold 181,440
Interest expense 3,600
Rent revenue 1,500
Sales 534,440
Selling expenses 65,000
Required:
Prepare a multiple-step income statement for the year ended June 30. Refer to the lists of Accounts in the information given, Labels, and Amount Descriptions for the exact wording of the answer choices for text entries. Negative amounts should be entered with a minus sign. Be sure to complete the statement heading.
Income Statement
Prepare a multiple-step income statement for the year ended June 30. Refer to the lists of Accounts in the information given, Labels, and Amount Descriptions for the exact wording of the answer choices for text entries. Negative amounts should be entered with a minus sign. Be sure to complete the statement heading.
Zanadu Co.
Income Statement
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Answer 1

Answer:

Zanadu Co.

Multiple-step Income Statement for the year ended June 30

Sales Revenue                  $534,440

Cost of goods sold               181,440

Gross profit                      $353,000

Rent revenue                          1,500

Administrative expenses    28,750

Selling expenses                65,000

Total operating expenses (93,750)

Operating income          $260,750

Interest expense                  (3,600)

Income before taxes       $257,150

Income taxes (30%)             (77,145)

Net income                      $180,005

Explanation:

a) Data and Calculations:

Administrative expenses $28,750

Cost of goods sold 181,440

Interest expense 3,600

Rent revenue 1,500

Sales 534,440

Selling expenses 65,000

b) A 30% income tax has been assumed for this question.