As an experienced, knowledgeable accountant, you review the statement and determine that the following steps were taken by the accountant to compute the amounts presented in the income statement. 1. 2. 3. 4. Net sales, as presented, consist of sales $1,184,300, less freight-out on merchandise sold $42,900, and sales returns and allowances $36,400. Other revenues, as presented, consist of sales discounts $23,400 and rent revenue $5,200. Selling expenses, as presented, consist of salespersons' salaries $104,000; depreciation on equipment $13,000; advertising $16,900; and sales commissions $7,800. The commissions represent commissions paid. At December 31, $3,900 of commissions have been earned by salespersons but have not been paid. All compensation should be recorded as Salaries and Wages Expense. Administrative expenses, as presented, consist of office salaries $61,100; dividends $23,400, utilities $15,600, interest expense $2,600, and rent expense $31,200, which includes prepayments totaling $7,800 for the first quarter of 2026. Prepare a correct detailed multiple-step income statement. Assume a 25% tax rate. (List other revenues before other expenses.)

As an experienced, knowledgeable accountant, you review the statement and determine that the following steps were taken by the accountant to compute the amounts presented in the income statement. 1. 2. 3. 4. Net sales, as presented, consist of sales $1,184,300, less freight-out on merchandise sold $42,900, and sales returns and allowances $36,400. Other revenues, as presented, consist of sales discounts $23,400 and rent revenue $5,200. Selling expenses, as presented, consist of salespersons' salaries $104,000; depreciation on equipment $13,000; advertising $16,900; and sales commissions $7,800. The commissions represent commissions paid. At December 31, $3,900 of commissions have been earned by salespersons but have not been paid. All compensation should be recorded as Salaries and Wages Expense. Administrative expenses, as presented, consist of office salaries $61,100; dividends $23,400, utilities $15,600, interest expense $2,600, and rent expense $31,200, which includes prepayments totaling $7,800 for the first quarter of 2026. Prepare a correct detailed multiple-step income statement. Assume a 25% tax rate. (List other revenues before other expenses.)

Name: As an experienced, knowledgeable accountant, you review the statement
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Description: As an experienced, knowledgeable accountant, you review the statement and determine that the following steps were taken by theaccountant to compute the amounts presented in the income statement.1.2.3.4.Net sales, as presented, consist of sales $1,18

College Accounting (Book Only): A Career Approach

12th Edition

ISBN:9781305084087

Author:Cathy J. Scott

Publisher:Cathy J. Scott

Chapter12: Financial Statements, Closing Entries, And Reversing Entries

Section: Chapter Questions

Problem 3E

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