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    4-2 Endless Company

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    yayaya
    The income statement of Endless Company for the year ended December 31, 2020 shows net sales of $8.6 million and net income of $1 million. Gross income was $3.65 million. Expenses including distribution costs of $1.26 million and administrative expenses of $1.14 million resulted in income before tax of $1.28 million. The statement of retained earnings shows retained earnings at the beginning of the year were $350,000 after a prior period adjustment, and ended at $900,000 after net income of $1 million and dividends paid of $450,000.

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    4-2 Endless Company

    Uploaded by

    yayaya
    3K views3 pages
    The income statement of Endless Company for the year ended December 31, 2020 shows net sales of $8.6 million and net income of $1 million. Gross income was $3.65 million. Expenses including distribution costs of $1.26 million and administrative expenses of $1.14 million resulted in income before tax of $1.28 million. The statement of retained earnings shows retained earnings at the beginning of the year were $350,000 after a prior period adjustment, and ended at $900,000 after net income of $1 million and dividends paid of $450,000.

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    The income statement of Endless Company for the year ended December 31, 2020 shows net sales of $8.6 million and net income of $1 million. Gross income was $3.65 million. Expenses including distribution costs of $1.26 million and administrative expenses of $1.14 million resulted in income before tax of $1.28 million. The statement of retained earnings shows retained earnings at the beginning of the year were $350,000 after a prior period adjustment, and ended at $900,000 after net income of $1 million and dividends paid of $450,000.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    3K views3 pages

    4-2 Endless Company

    Uploaded by

    yayaya
    The income statement of Endless Company for the year ended December 31, 2020 shows net sales of $8.6 million and net income of $1 million. Gross income was $3.65 million. Expenses including distribution costs of $1.26 million and administrative expenses of $1.14 million resulted in income before tax of $1.28 million. The statement of retained earnings shows retained earnings at the beginning of the year were $350,000 after a prior period adjustment, and ended at $900,000 after net income of $1 million and dividends paid of $450,000.

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    Endless Company

    Income Statement
    Year ended December 31, 2020

    Net Sales 1 8,600,000


    Cost of goods sold 2 4,950,000
    Gross income 3,650,000
    Other income 3 80,000
    Total income 3,730,000
    Expenses
    Distribution costs 4 1,260,000
    Administrative expenses 5 1,140,000
    Other expenses 6 50,000 2,450,000
    Income before tax 1,280,000
    Income tax expense 280,000
    Net income 1,000,000

    Note 1 Net sales revenue


    Sales 8,750,000
    Sales returns and allowances 150,000
    8,600,000

    Note 2 Cost of goods sold


    Merchandise inventory, beginning 1,100,000
    Purchases 4,600,000
    Freight in 145,000
    Purchase R&A 45,000 4,700,000
    Goods available for sale 5,800,000
    Merchandise inventory, ending 1,000,000
    Cost of goods sold before writedown 4,800,000
    Loss from inventory writedown 150,000
    Cost of goods sold after writedown 4,950,000

    Note 3 Other income


    Dividend revenue 50,000
    Gain on sale of equipment 10,000
    Interest revenue 20,000
    80,000

    Note 4 Distribution cost


    Delivery expenses 425,000
    Depreciation - delivery truck 60,000
    Depreciation - store equipment 25,000
    Sales salaries 600,000
    Store supplies 150,000
    1,260,000
    Note 5 Administrative expenses
    Contribution 125,000
    Depreciation - office 35,000
    Doubtful accounts 30,000
    Office salaries 950,000
    1,140,000

    Note 5 Other expenses


    Loss on sale of trading securities 50,000
    Endless Company
    Statement of Retained Earnings
    Year ended December 31, 2020

    Retained earnings, January 1 550,000


    Prior period error - under depreciation on 2019 200,000
    Corrected beginning balance 350,000
    Net income 1,000,000
    Total 1,350,000
    Dividends paid 450,000
    Retained earnings, Decembaer 31 900,000

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