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  • Mar 9, 2011, 07:42 AM
    mgordo1
    Create and Income statement
    Can you help me create an income statement for the following:

    Jones Corp during calendar year ending December 31, 2010 had sales of $200,000 with a gross profit that was 50% of sales and selling expenses that were 15% of sales. Administrative Expenses $12,000 and Interest Expense $5,000. During the year, Jones Corp sold a piece of its operating equipment that currently has a book value $9,000 for $15,000. Also , during the year Jones Corp dumped a product line with sales of $20,000 and expenses of $26,000. Assets used to produce the discontinued product line were sold for $15,000-had a cost of $100,000 had been depreciated (no salvage). Additionally during the year a fire swept through the offices destroying $40,000 of furniture with a recovery of only $20,000 from the insurance company for loss. Assume the tax rate of 20%
  • Mar 9, 2011, 08:57 AM
    mgordo1
    This is what I came up with:

    Sale $200,000
    (Less) $100,000
    Gross Margin $100,000 ($200,000 @ 50%)
    (Less) Operating Expenses
    Selling Exp. $30,000 ($200,000@15%)
    Deprec.Exp-Sales?? I can't figure this out Can you explain this to me?
    Administrative Expenses
    Admin Expense $12,000
    Income from Operations??
    Add: Other Revenue
    Gains on Sale Equip. $ 6,000
    Interest Exp. $ 5,000
    Income from continuing operations before taxes $1,000
    Less Fed. Taxes??
    Income from Continuing Operation before tax
    Discontinue Segments:**** This section I have no idea*******
    (net of tax savings)??
    Gain on sales of discounted segment ****I have no idea******
    (net of tax)??
    Income before extraordinary items
    (net of tax savings)??
    Net Income??

    I

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