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Kieso, Intermediate Accounting, 16e Problem 4-4 The following account balances were included in the trial balance of Twain Corporation at June 30, 2017. Sales revenue Sales discounts Cost of goods sold Salaries and wages expense (sales) Sales commissions Travel expense (salespersons) Delivery expense Entertainment expense Telephone and Internet expense (sales) Depreciation expense (sales equipment) Maintenance and repairs expense (sales) Miscellaneous selling expenses Office supplies used Telephone and Internet expense (administration) $1,578,500 31,150 896,770 56,260 97,600 28,930 21,400 14,820 9,030 4,980 6,200 4,715 3,450 2,820 Depreciation expense (office furniture and equipment) Property tax expense Bad debt expense (selling) Maintenance and repairs expense (administration) Office expense Sales returns and allowances Dividends received Interest expense Income tax expense Depreciation understatement due to error-2014 (net of tax) Dividends declared on preferred stock Dividends declared on common stock $7,250 7,320 4,850 9,130 6,000 62,300 38,000 18,000 102,000 17,700 9,000 37,000 The Retained Earnings account had a balance of $337,000 at July 1, 2016. There are 80,000 shares of common stock outstanding. Using the multiple-step form, prepare an income statement for the year ended June 30, 2017. (Round earnings per share to 2 decimal pla TWAIN CORPORATION Income Statement
Expert Answer
| 1 | TWAIN CORPORATION | |||
| Income Statement | ||||
| For the month ended June 30, 2017 | ||||
| Sales Revenue | ||||
| Sales Revenue | $1,578,500 | |||
| Less: Sales Discount | $31,150 | |||
| Sales Return & Allowances | $62,300 | $93,450 | ||
| Net Sales | $1,485,050 | |||
| Cost of goods sold | $896,770 | |||
| Gross Profit | $588,280 | |||
| Opertating Expenses | ||||
| Selling expenses | ||||
| Sales Commission | $97,600 | |||
| Salaries and wages exp | $56,260 | |||
| Travel expense | $28,930 | |||
| Freight-out | $21,400 | |||
| Entertainment expense | $14,820 | |||
| Telephone and Internet expense | $9,030 | |||
| Maintenance and repairs expense | $6,200 | |||
| Depreciation expense | $4,980 | |||
| Bad debt expense | $4,850 | |||
| Misc. selling expenses | $4,715 | $248,785 | ||
| Administrative Expenses | ||||
| Maintenance and repairs expense | $9,130 | |||
| Property tax expense | $7,320 | |||
| Office supplies used | $3,450 | |||
| Telephone & internet expenses | $2,820 | |||
| Depreciation expense | $7,250 | |||
| Maintenance and repairs expense | $9,130 | |||
| Office expenses | $6,000 | $45,100 | ||
| Income from operation | $294,395 | |||
| Other revenue & Gains | ||||
| Dividend Revenue | $38,000 | |||
| Other expenses & losses | ||||
| Interest expenses | $18,000 | |||
| Depreciation understatement due to error (2014) | $17,700 | $35,700 | ||
| Income before Income tax | $296,695 | |||
| Income Tax | $102,000 | |||
| Net Income for the year | $194,695 | |||
| Earning per common share | $2.43 | |||
| 2 | TWAIN CORPORATION | |||
| Retained Earnings Statement | ||||
| For the month ended June 30, 2017 | ||||
| Retained Earnings, June 1 | $337,000 | |||
| Add: Net Income / (loss) | $194,695 | |||
| $531,695 | ||||
| Less: | ||||
| Preferred Stock Dividend | $9,000 | |||
| Common Stock Dividend | $37,000 | $46,000 | ||
| Retained Earnings, June 30 | $485,695 | |||
