Question

The following account balances were included in the trial balance of Sarasota Corporation at June 30, 2017. Sales revenue $ 1,579,860 Depreciation expense (office furniture and equipment) $ 6,762 Sales discounts 31,690 Property tax expense 6,843 Cost of goods sold 897,100 Bad debt expense (selling) 4,503 Salaries and wages expense (sales) 56,690 Maintenance and repairs expense (administration) 8,281 Sales commissions 98,950 Office expense 5,980 Travel expense (salespersons) 31,900 Sales returns and allowances 63,694 Delivery expense 23,150 Dividends received 39,910 Entertainment expense 15,110 Interest expense 16,440 Telephone and Internet expense (sales) 9,080 Income tax expense 98,290 Depreciation expense (sales equipment) 5,069 Depreciation understatement due to error—2014 (net of tax) 17,004 Maintenance and repairs expense (sales) 6,440 Dividends declared on preferred stock 9,210 Miscellaneous selling expenses 5,045 Dividends declared on common stock 38,360 Office supplies used 3,368 Telephone and Internet expense (administration) 3,097 The Retained Earnings account had a balance of $ 364,510 at July 1, 2016. There are 83,970 shares of common stock outstanding. Using the multiple-step form, prepare an income statement for the year ended June 30, 2017. (Round earnings per share to 2 decimal places, e.g. 1.48.) SARASOTA CORPORATION Income Statement $ : List of Accounts Prepare a retained earnings statement for the year ended June 30, 2017. (List items that increase adjusted retained earnings first.) SARASOTA CORPORATION Retained Earnings Statement $ : List of Accounts Using the single-step form, prepare an income statement for the year ended June 30, 2017. (Round earnings per share to 2 decimal places, e.g. 1.48.) SARASOTA CORPORATION Income Statement $ $ $ eTextbook and Media List of Accounts Prepare a retained earnings statement for the year ended June 30, 2017. (List items that increase adjusted retained earnings first.) SARASOTA CORPORATION Retained Earnings Statement $ :

Answer 1

* Prepare an income statement for the year ended June 30, 2017.

(a)                                                 Sarasota Corporation
		Income Statement
		For the Year Ended June 30, 2017
		Sales Revenue
		Sales revenue						$ 1,579,860
		Less: Sales discounts			$31,690
		Sales returns and allowances			63,694			95,384
		Net sales						1,484,476
		Less: Cost of goods sold						897,100
		Gross profit						587,376
		Less: Operating Expenses
		Selling expenses
		Sales commissions			$98,950
		Salaries and wages exp.			56,690
		Travel expense			31,900
		Freight-out			23,150
		Entertainment expense			15,110
		Telephone and Internet expense			9,080
		Maintenance and repairs expense			6,440
		Depreciation expense			5,069
		Bad debt expense			4,503
		Misc. selling expenses			5,045			255,937
	Less: Administrative Expenses
	Maintenance and repairs expense					8,281
	Property tax expense					6,843
	Depreciation expense					6,762
	Supplies expense					3,368
	Telephone and internet expense					3,097
	Miscellaneous office expenses					5,980	34,331
	Income from operations						297,108

Add: Other Revenues and Gains
Dividend revenue			39,910
Less: Other Expenses and Losses
Interest expense			16,440
Income before income tax			320,578
Less: Income tax			98,290
Net income			$222,288
Earnings per common share     [($222,288 – $9,210) ÷ 83,970]			$2.53

* List items that increase adjusted retained earnings first.

Net Income - $ 222,288

* Using the single-step form, prepare an income statement for the year ended June 30, 2017.

Sarasota Corporation
	Income Statement
	For the Year Ended June 30, 2017
	Revenues
	Net sales		$1,484,476
	Dividend revenue		39,910
	Total revenues		1,524,386
	Expenses
	Cost of goods sold		897,100
	Selling expenses		255,937
	Administrative expenses		34,331
	Interest expense		16,440
	Total expenses		1,203,808
	Income before income tax		320,578
	Income tax		98,290
	Net income		$   222,288
	Earnings per common share		$2.53

Thank You.