A part-time bookkeeper prepared this income statement for Kritek Company for the year ending December 31, 2012.
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| Revenues | ||
| Sales revenue | $720,000 | |
| Less: Freight-out | $14,000 | |
| Sales discounts | 11,300 | 25,300 |
| Net sales | 694,700 | |
| Other revenues (net) | 1,300 | |
| Total revenues | 696,000 | |
| Expenses | ||
| Cost of goods sold | 460,000 | |
| Selling expenses | 103,000 | |
| Administrative expenses | 54,000 | |
| Dividends | 12,000 | |
| Total expenses | 629,000 | |
| Net income | $ 67,000 | |
As an experienced, knowledgeable accountant, you review the statement and determine the following facts.
1. Sales include $12,000 of deposits from customers for future sales orders.
2. Other revenues contain two items: interest expense $4,000 and interest revenue $5,300.
3. Selling expenses consist of sales salaries and wages $82,500, advertising $13,000, and depreciation on store equipment $7,500.
4. Administrative expenses consist of office salaries $23,000; utilities expense $9,500; rent expense $14,500; and insurance expense $7,000. Insurance expense includes $1,200 of insurance applicable to 2013.
Instructions
Prepare a correct detailed multiple-step income statement. Assume a tax rate of 25%.
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