Question

In: Accounting

The following calendar year-end information is taken from the December 31, 2019, adjusted trial balance and other records of Leone Company.

The following calendar year-end information is taken from the December 31, 2019, adjusted trial balance and other records of Leone Company.

   

               
Advertising expense $ 30,000   Direct labor $ 673,600  
Depreciation expense—Office equipment   10,300   Income taxes expense   293,900  
Depreciation expense—Selling equipment   10,300   Indirect labor   58,000  
Depreciation expense—Factory equipment   31,700   Miscellaneous production costs   9,200  
Factory supervision   126,300   Office salaries expense   75,000  
Factory supplies used   9,300   Raw materials purchases   998,000  
Factory utilities   40,000   Rent expense—Office space   23,000  
Inventories       Rent expense—Selling space   26,000  
Raw materials, December 31, 2018   164,300   Rent expense—Factory building   82,600  
Raw materials, December 31, 2019   181,000   Maintenance expense—Factory equipment   38,100  
Work in process, December 31, 2018   16,200   Sales   4,495,600  
Work in process, December 31, 2019   23,300   Sales salaries expense   391,600  
Finished goods, December 31, 2018   167,200          
Finished goods, December 31, 2019   143,200          
 

2. Prepare the company’s 2019 income statement that reports separate categories for (a) selling expenses and (b) general and administrative expenses.

Solutions

Expert Solution

Leone Company
Income statement
Sales 4,495,600
cost of goods sold
Finished goods iventory,December 31,2018 167,200
Cost of goods manufactured 2,043,000
Goods available for sale 2,210,200
less:Finished goods inventory,December 31,2019 143,200
cost of goods sold 2,067,000
Gross profit from sales 2,428,600
Operating expenses
Selling expenses
Sales salaries expense 391,600
Depreciation expense-selling equipment 10,300
Rent expense-selling space 26,000
Advertising expense 30,000
Total selling expenses 457,900
General and administrative expensess
Rent expense-office space 23,000
office salaries expense 75,000
Depreciaiton expense-office equipment 10,300
Total general and administrative expense 108,300
total operating expense 566,200
income before taxes 1,862,400
income tax expense 293,900
Net income 1,568,500

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