Alex didn”t study very hard when he took accounting because he thought he wouldn”t ever use it on the job at Valentine Company. Yesterday, after preparing all end of the month adjusting entries, both of the company”s accounting staff became ill. The company owner, knowing that Alex had taken accounting as part of his college major, asked him to finish the job by preparing the financial statements. The owner needs the statements tomorrow to present to her banker. Alex isn”t sure that his income statement is prepared properly.
|
Valentine Company |
|
|
Sales revenue |
$48,500 |
|
Wages expense |
11,369 |
|
Operating income |
37,131 |
|
Operating expenses: |
|
|
Advertising |
3,133 |
|
Cost of goods sold |
30,070 |
|
Insurance |
670 |
|
Interest expense |
240 |
|
Utilities |
1,250 |
|
Gross profit |
1,768 |
|
Depreciation expense |
282 |
|
Pretax income |
1,486 |
|
Income tax expense |
519 |
|
Net income |
$967 |
Alex is confident that each revenue account and expense account balance is correct because those were determined by the accounting staff. He is unsure, however, that he has organized them properly on the income statement. Therefore, he is unsure about the summary amounts listed in bold faced print on the statement.
Rearrange the accounts into proper income statement format. Be sure to date the statement correctly.