Accounting

Module 3 – SLP

Income Statement
We are using the same company as in the second module. However, you need to consider some additional information.
•One client had indicated that they were interested in purchasing $42,500 worth of products, so the bookkeeper recorded the transaction. However, the client has not actually committed to the purchase.
•The bookkeeper already corrected the sales account. However, the bookkeeper may have made a mistake when computing cost of goods sold. She included total production costs for 2012 and did not adjust ending inventory for the $42,500 worth of units left at the end of the year. The amount of ending inventory was determined using a physical count.

 
Nybrostrand Company

 
31-Dec-12

 

 

 
Trial Balance (accounts in alphabetical order)

 

 
Debit
Credit

 
Accounts payable

 
78,000

 
Accounts receivable
36,500

 

 
Cash
30,000

 

 
Common stock

 
10,000

 
Depreciation expense
24,350

 

 
Cost of goods sold
307,000

 

 
Equipment (net of depreciation)
415,000

 

 
Insurance
1,400

 

 
Inventory
34,000

 

 
Long-term debt

 
127,000

 
Marketing
4,500

 

 
Paid-in capital

 
50,000

 
Property taxes
16,900

 

 
Rent
28,000

 

 
Retained earnings

 
?

 
Revenues

 
586,000

 
Salaries
78,500

 

 
Utilities
6,700

 

 

 

 

 

 
Total
982,850
851,000
SLP Assignment Expectations

Prepare an income statement for the company in good format. Always include the name of the company and the period covered in the title. Don’t forget dollar signs where appropriate. You do not need to include the balance sheet. Consequently, you will not need all the accounts listed above. How does the income or loss compare to the original income statement? Explain the importance of the matching concept.

The submission should be 2 to 4 pages and need to include answers to all the questions listed above. Show computations, discuss the results and include references in APA format.

 

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