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

Question:

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

Sales = $105,100

Sales Returns and Allowances = ?

Sales Discounts = 4,700

Net Sales = ?

Cost of Goods Sold = 61,100

Gross Profit = 36,800

Selling Expenses = ?

General and Administrative Expenses = 8,700

Total Operating Expenses = 20,600

Net Income = ?

Income Statement:

The income statement for a given firm is one of the four financial statements for a given financial period, others being the balance sheet, the cash flow statement and the statement of change in the shareholders' equity. It is usually prepared in the form of a single-step statement or a multi-step statement.

Answer and Explanation:

The net sales amount is given by:

  • = Gross Profit + cost of goods sold
  • = $36,800 + $61,100
  • = $97,900

The sales returns and allowances is given by:

  • = Sales - net sales - sales discounts
  • = $105,100 - $97,900 - $4,700
  • = $2,500

The selling expenses is given by:

  • = Total operating expenses - general and administrative expenses
  • = $20,600 - $8,700
  • = $11,900

The net income is given by:

  • = Gross profit - total operating expenses
  • = $36,800 - $20,600
  • = $16,200

Learn more about this topic:

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How to Make an Income Statement: Example & Analysis

from Accounting 201: Intermediate Accounting I

Chapter 5 / Lesson 6
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