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Nilk Specialty Products Income Statement For the month ended January 31, 2020 Sales (net) Less costs and expenses: P790,000 Raw materials purchases Direct labor cost Advertising expense Selling and administrative salaries Rent on factory facilities Depreciation on sales equipment Depreciation on factory equipment Indirect labor cost Utilities expense Insurance expense P254,000 200,000 95,000 70,000 62,000 43,000 30,000 29,000 14,000 6,000 803,000 (P13,000) Net loss | Prior to 2019, the company has been operating with a profit. Mr. Nilk, the owner is suspecting the accuracy of the report. As his friend, you were requested to review the income statement and make the necessary corrections. After examining the manufacturing costs record, you have acquired the following additional data. a. Inventory balances at the beginning and end of January 2020 were: Raw materials Work in process Finished goods January 1 P20,000 14,000 30,000 January 31 P32,000 16,000 48,000 b. Only 60% of the utilities expense and 70% insurance expense apply to the factory, the rests should be charged to the selling and administrative activities.

Nilk Specialty Products Income Statement For the month ended January 31, 2020 Sales (net) Less costs and expenses: P790,000 Raw materials purchases Direct labor cost Advertising expense Selling and administrative salaries Rent on factory facilities Depreciation on sales equipment Depreciation on factory equipment Indirect labor cost Utilities expense Insurance expense P254,000 200,000 95,000 70,000 62,000 43,000 30,000 29,000 14,000 6,000 803,000 (P13,000) Net loss | Prior to 2019, the company has been operating with a profit. Mr. Nilk, the owner is suspecting the accuracy of the report. As his friend, you were requested to review the income statement and make the necessary corrections. After examining the manufacturing costs record, you have acquired the following additional data. a. Inventory balances at the beginning and end of January 2020 were: Raw materials Work in process Finished goods January 1 P20,000 14,000 30,000 January 31 P32,000 16,000 48,000 b. Only 60% of the utilities expense and 70% insurance expense apply to the factory, the rests should be charged to the selling and administrative activities.

Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter5: The Income Statement And The Statement Of Cash Flows
Section: Chapter Questions
Problem 2E: Cost of Goods Sold and Income Statement Schuch Company presents you with the following account...
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Nilk Specialty Products Income Statement For the month ended January 31, 2020 Sales (net) Less costs and expenses: Raw materials purchases P790,000 P254,000 200,000 95,000 70,000 62,000 43,000 30.000 Direct labor cost Advertising expense Selling and administrative salaries Rent on factory facilities Depreciation on sales equipment Depreciation on factory equipment Indirect labor cost Utilities expense Insurance expense 29,000 14,000 6,000 803,000 (P13,000) Net loss Prior to 2019, the company has been operating with a profit. Mr. Nilk, the accuracy of the report. As his friend, you were requested to review the income statement and make the necessary corrections. After examining the manufacturing costs record, you have acquired the following additional data. owner suspecting a. Inventory balances at the beginning and end of January 2020 were: January 1 P20,000 14,000 30,000 January 31 P32,000 16,000 48,000 Raw materials Work in process Finished goods b. Only 60% of the utilities expense and 70% insurance expense apply to the factory, the rests should be charged to the selling and administrative activities.
Transcribed Image Text:Nilk Specialty Products Income Statement For the month ended January 31, 2020 Sales (net) Less costs and expenses: Raw materials purchases P790,000 P254,000 200,000 95,000 70,000 62,000 43,000 30.000 Direct labor cost Advertising expense Selling and administrative salaries Rent on factory facilities Depreciation on sales equipment Depreciation on factory equipment Indirect labor cost Utilities expense Insurance expense 29,000 14,000 6,000 803,000 (P13,000) Net loss Prior to 2019, the company has been operating with a profit. Mr. Nilk, the accuracy of the report. As his friend, you were requested to review the income statement and make the necessary corrections. After examining the manufacturing costs record, you have acquired the following additional data. owner suspecting a. Inventory balances at the beginning and end of January 2020 were: January 1 P20,000 14,000 30,000 January 31 P32,000 16,000 48,000 Raw materials Work in process Finished goods b. Only 60% of the utilities expense and 70% insurance expense apply to the factory, the rests should be charged to the selling and administrative activities.
3. Prepore a Correct income statement in simplificd form. NILK SPECIALTY PRODUCTS Statement of Income For the month ended January 31 , 2020 Net sales (1) 790,000 Less cost of goods sold Gross profit (2) 555,600 234,400 Add other income (3) XXX Total gross income Less operating expenses: Advertising expenses XXX (4) (5) 95,000 Selling and Admin Salaries 70,000 Depreciation on Sales Equipment Utilities Expenses (1,400 * (1-60%) Insurance Expenses (6,000 * (1-70%) (6) 43,000 (7) 5,600 (8) 1,800 Total expenses 215,400 Operating Income XXX Less interest expense XXX Income before tax XXX Less income tax XXX Net income / (loss) P 340,200
Transcribed Image Text:3. Prepore a Correct income statement in simplificd form. NILK SPECIALTY PRODUCTS Statement of Income For the month ended January 31 , 2020 Net sales (1) 790,000 Less cost of goods sold Gross profit (2) 555,600 234,400 Add other income (3) XXX Total gross income Less operating expenses: Advertising expenses XXX (4) (5) 95,000 Selling and Admin Salaries 70,000 Depreciation on Sales Equipment Utilities Expenses (1,400 * (1-60%) Insurance Expenses (6,000 * (1-70%) (6) 43,000 (7) 5,600 (8) 1,800 Total expenses 215,400 Operating Income XXX Less interest expense XXX Income before tax XXX Less income tax XXX Net income / (loss) P 340,200
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