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Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
ISBN: 9781337115773

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BuyFindarrow_forward

Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
ISBN: 9781337115773
Textbook Problem
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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.

To determine

Prepare the income statement of Company S for the month of June.

Explanation

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
 Amount ($)Amount ($)
Sales revenue 752,000
Cost of goods sold: 433,000
Gross margin 319,000
Less: Selling expense:  
Commission75,200 
Fixed selling expense65,000140,200
Administrative expense 53,800
Net Income 125,000

Table (1)

Therefore, the amount of net income is $125,000...

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