income sheet 460824

One client had indicated that they were interested in purchasing $35,500 worth of products, so the bookkeeper recorded the transaction. However, the client has not actually committed to the purchase.

The bookkeeper may have made a mistake when computing cost of good sold. She included total production costs for 2011 and did not adjust ending inventory for the $35,500 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-11

Trial Balance (accounts in alphabetical order)

Debit

Credit

Accounts payable

67,000

Accounts receivable

24,500

Cash

16,700

Common stock

10,000

Depreciation expense

24,350

Cost of goods sold

254,000

Equipment (net of depreciation)

425,000

Insurance

1,400

Inventory

25,000

Long-term debt

145,000

Marketing

4,500

Paid-in capital

90,000

Property taxes

8,900

Rent

18,000

Retained earnings

?

Revenues

456,000

Salaries

67,500

Utilities

6,700

Total

876,550

768,000

Prepare an income statement for the company in good format. Always include the name of the company and the priod 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.