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

## Question:

Smith Company has the following account balances, extracted from its multiple-step income statement for the current year. Compute the missing amounts.

Sales = \$107,600

Sales Returns and Allowances = ?

Sales Discounts = 4,300

Net Sales = ?

Cost of Goods Sold = 54,600

Gross Profit = 44,800

Selling Expenses General and Administrative Expenses = 12,000

Total Operating Expenses = 23,300

Net Income = ?

## Income Statement:

Income statement is one of the basic and required financial statements of a company. This reports information regarding the company's sales/service revenue with the corresponding expenses incurred during the year. Income statement reports only income/loss information for the reporting period. Its accumulated amount is recorded under retained earnings (for corporations) and owner's equity (for single proprietorship).

## Answer and Explanation:

 Sales 107,600 Sales Returns and Allowances (net Sales + Sales discount - Sales) -3,900 Sales Discounts -4,300 Net Sales (COGS + Gross Profit) 99,400 Cost of Goods Sold -54,600 Gross Profit 44,800 Selling Expenses General and Administrative Expenses -12,000 Total Operating Expenses -23,300 Net Income (Gross Profit - Selling & admin and operating expenses) 9,500