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Managerial Accounting: The Corners...
Solutions
Managerial Accounting: The Corners...
Use the following information for Brief Exercises 2-24 and 2-25:
Slapshot Company makes ice hockey sticks and sold 1,880 sticks during the month of June at a total cost of $433,000. Each stick sold at a price of $400. Slapshot also incurred two types of selling costs: commissions equal to 10% of the sales price and other selling expense of $65,000. Administrative expense totaled $53,800.
Brief Exercise 2-24 Manufacturing Firm Income Statement
Refer to the information for Slapshot Company on the previous page.
Required:
Prepare an income statement for Slapshot for the month of June.
Prepare the income statement of Company S for the month of June.
Income Statement:
The statement that shows revenue and expenses incurred over a period of time (usually one year) is called income statement. It is used for external financial reporting as it helps the outsiders and investors in evaluating the firm’s financial health.
The income statement of Company P for the month of December is given below:
| Company S | ||
| Income Statement | ||
| For the month of June | ||
| Â | Amount ($) | Amount ($) |
| Sales revenue | Â | 752,000 |
| Cost of goods sold: | Â | 433,000 |
| Gross margin | Â | 319,000 |
| Less: Selling expense: | Â | Â |
| Commission | 75,200 | Â |
| Fixed selling expense | 65,000 | 140,200 |
| Administrative expense | Â | 53,800 |
| Net Income | Â | 125,000 |
Table (1)
Therefore, the amount of net income is $125,000...
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