[majax79]

I have an assignment to make a multiple income statement from a given trial balance.

The income statement form has 4 columns and that confuses me.

Balance Sheet

Debit Credit
Cash $1,893
Accounts Receivable 870
Merchandise Inventory 1700
A. Wilbert, Capital $4,200
Sales 1900
Sales Returns and Allowances 30
Purchases 1,640
Purchases Returns and Allowances 90
Purchase Discounts 33
Freight-In 90
$6,223 $6,223


Like I said, the income statement is in an excel worksheet and there are 4 columns so I can't figure out how to get the net income. I do get the information that Gross Profit is $859

[CaptainForest]

Don't let the columns confuse you.

You can do it in 2 columns if you want.

Stick to what you know... Sales - COGS = Gross Profit - Expenses = Net Income, and you should get to your answer.

So you start:
Sales 1900
Less: Sales Returns and Allowances 30
Equal Net Sales of 1870

What do you do next?

[majax79]

It says in the book to "prepare an income statement through gross profit, assuming merchandise inventory on hand at April 30 is $2,296.

I think a cost of goods sold needs to be determined.

[CaptainForest]

In your first post, you have said purchases were 1,640, freight in was 90, etc.

So how in your second post you have purchases at 325,000 and freight in at 12,200, etc??

Plus you say ending inventory is 2,296, yet in your picture you have it at 40,000

Also, isn't your year end April 30 and not Dec 31?

And what is your opening inventory?

[majax79]

I'm sorry... the picture is how I believe the income statement should be setup. It's the only pic in this chapter that has 4 columns.

My beginning inventory is $1,700

[CaptainForest]

Ok, then the picture would be a good format to calculate COGS