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Brown Company has the following account balances, extracted from its multiple-step income...

Question:

Brown Company has the following account balances, extracted from its multiple-step income statement for the current year.

Required:

Compute the missing amounts.

Sales $
Sales Returns and Allowances 4,200
Sales Discounts 3,000
Net Sales 104,200
Cost of Goods Sold 57,900
Gross Profit Selling Expenses 10,500
General and Administrative Expenses
Total Operating Expenses
Net Income 26,400

Profit and Loss Statement

A profit and loss statement prepares in order to show the total revenue earned and the total expenses associated with sales activity incurred. This is the other name of income statement but widely used by all businesses.

Answer and Explanation:

Account Amount Explanation
Sales $111,400 Add back sales returns and allowances and sales discounts with net sales
Sales Returns and Allowances 4,200
Sales Discounts 3,000
Net Sales 104,200
Cost of Goods Sold 57,900
Gross Profit Selling Expenses 10,500
General and Administrative Expenses 21,000 Deduct gross profit selling expenses with the total operating expenses
Total Operating Expenses 31,500 Deduct net income with the cost of goods sold
Net Income 26,400

Learn more about this topic:

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What Is an Income Statement? - Purpose, Components & Format

from Accounting 101: Financial Accounting

Chapter 2 / Lesson 2
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