Douglas Werther is the principal owner of Green Pen Company. His 19 year old daughter, Jessica, is a first year accounting student. She took Financial Accounting, but not Managerial Accounting. Douglas would like to give his daughter practical experience. He allows her to prepare the company's Income Statement and have her show it to you, the company's controller. Below is the statement Jessica prepared: (Assume all account balances are accurate) Green Pen Company Income Statement Year Ended December 31, 2018 Sales 1,400,000 Expenses: Raw Materials 53,000 Rent Expense, Factory Rent Expense, Office Bldg Insurance Expense, Factory Insurance Expense, Office Bldg 14,000 10,000 6,000 3,000 Indirect Labor 25,000 Depreciation Expense, Office Bldg Depreciation Expense, Factory 12,000 13,000 Direct Labor 50,000 Cost of Goods Sold Factory Maintenance Advertising Expense Selling and Admin Salary Expense Misc Selling and Admin Expenses Total Expenses 770,000 22,000 100,000 124,000 31,000 1,233,000 167,000 Net Income
Douglas Werther is the principal owner of Green Pen Company. His 19 year old daughter, Jessica, is a first year accounting student. She took Financial Accounting, but not Managerial Accounting. Douglas would like to give his daughter practical experience. He allows her to prepare the company's Income Statement and have her show it to you, the company's controller. Below is the statement Jessica prepared: (Assume all account balances are accurate) Green Pen Company Income Statement Year Ended December 31, 2018 Sales 1,400,000 Expenses: Raw Materials 53,000 Rent Expense, Factory Rent Expense, Office Bldg Insurance Expense, Factory Insurance Expense, Office Bldg 14,000 10,000 6,000 3,000 Indirect Labor 25,000 Depreciation Expense, Office Bldg Depreciation Expense, Factory 12,000 13,000 Direct Labor 50,000 Cost of Goods Sold Factory Maintenance Advertising Expense Selling and Admin Salary Expense Misc Selling and Admin Expenses Total Expenses 770,000 22,000 100,000 124,000 31,000 1,233,000 167,000 Net Income
Business Its Legal Ethical & Global Environment
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Author:JENNINGS
Publisher:JENNINGS
Chapter10: Cyberlaw, Social Media, And Privacy
Section: Chapter Questions
Problem 2QAP
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Prepare the correct income statement using the firm provided.
Explain to Jessica what mistakes she made.
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