Share
Explore BrainMass

Preparing an Income Statement

Hoopes Company is preparing financial statements for the calendar year 2006. The following totals for each account have been verified as correct:

Office Supplies on Hand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 600
Insurance Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 240
Gross Sales Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,000
Cost of Goods Sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . 6,440
Sales Returns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 400
Interest Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200
Accounts Payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 240
Accounts Receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 520
Extraordinary Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,160
Selling Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 720
Office Supplies Used . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 160
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 600
Revenue from Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 560
Number of shares of capital stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 180

Prepare an income statement using good form. That means that the items are listed in the proper order. Assume a 30% income tax rate on both income from operations and extraordinary items. Be sure to include EPS numbers.

Attachments

Solution Preview

Please see the attached file.

Gross Sales Revenue . . . . . . . . . . . . . . . . . . . . . . . . ........ . . . . . . . . . . . . . . . . 12,000
Sales Returns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 400
Net Sales Revenue 11,600
Cost of Goods Sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 6,440
Gross Profit ...

Solution Summary

This solution is comprised of an income statement prepared for Hoopes Company.

$2.19