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Question & Answer: The following transactions pertain to 2015, the first-year operations of Bailey Company. All inventory was starte…..

The following transactions pertain to 2015, the first-year operations of Bailey Company. All inventory was started and completed during 2015. Assume that all transactions are cash transactions. 000 cash by issuing common stock. 1. Acquired $5, 2. Paid $710 for materials used to produce inventory. 3. Paid $1,970 to production workers. 4. Paid $761 rental fee for production equipment. 5. Paid $90 to administrative employees. 6. Paid $110 rental fee for administrative office equipment. 7. Produced 310 units of inventory of which 250 units were sold at a price of $13 each. Required a-1. Prepare an income statement. (Do not round intermediate calculations.) BAILEY COMPANY Income Statement for 2015 Sales revenue 3,250 Cost of goods sold

The following transactions pertain to 2015, the first-year operations of Bailey Company. All inventory was started and completed during 2015. Assume that all transactions are cash transactions. 1. Acquired $5,000 cash by issuing common stock. 2. Paid $710 for materials used to produce inventory. 3. Paid $1, 970 to production workers. 4. Paid $761 rental fee for production equipment. 5. Paid $90 to administrative employees. 6. Paid $110 rental fee for administrative office equipment. 7. Produced 310 units of inventory of which 250 units were sold at a price of $13 each. a-1. Prepare an income statement. (Do not round intermediate calculations.)

Expert Answer

 

SOLUTION:

Amount
Sales revenue $3,250
Less: Cost of goods sold
$2,775
Gross margin $475
Less: Administrative expenses $90
Less: Rental fees for administrative equipment $110
Net income $275
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