Instractions

The following income statement contains errors.

Curbstone Company

Income Statement

For the Year Ended August 31, 2016

1	Sales		$8,595,000.00
2	Cost of merchandise sold		6,110,000.00
3	Income from operations		$2,485,000.00
4	Operating expenses:
5	Selling expenses	$800,000.00
6	Administrative expenses	575,000.00
7	Delivery expense	425,000.00
8	Total operating expenses		1,800,000.00
9			$685,000.00
10	Other income and expense:
11	Interest revenue		45,000.00
12	Gross profit		$640,000.00

Identify the errors by preparing a corrected multiple-step income statement. Be sure to complete the heading of the statement. Refer to the information given in the exercise and to the list of Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries. A colon (:) will automatically appear if it is required. In the Other income and expenses section only, enter amounts that represent other expenses as negative numbers using a minus sign.

CHART OF ACCOUNTS

Curbstone Company

General Ledger

	ASSETS
110	Cash
120	Accounts Receivable
125	Notes Receivable
130	Merchandise Inventory
131	Estimated Returns Inventory
140	Office Supplies
141	Store Supplies
142	Prepaid Insurance
180	Land
190	Building
191	Accumulated Depreciation-Building
192	Equipment
193	Accumulated Depreciation-Equipment

	LIABILITIES
210	Accounts Payable
216	Salaries Payable
218	Sales Tax Payable
219	Customers Refunds Payable
230	Notes Payable

	EQUITY
310	Owner, Capital
311	Owner, Drawing
312	Income Summary

LabelsAugust 31, 2016For the Year Ended August 31, 2016Operating expensesOther income and expenseAmount DescriptionsGross profitIncome from operationsNet incomeNet lossTotal assetsTotal liabilitiesTotal operating expensesTotal owners equity

Incomestatement

Identify the errors by preparing a corrected multiple-step income statement. Be sure to complete the heading of the statement. Refer to the information given in the exercise and to the list of Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries. A colon (:) will automatically appear if it is required. In the Other income and expenses section only, enter amounts that represent other expenses as negative numbers using a minus sign.

Curbstone Company

Income Statement

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	REVENUE
410	Sales
610	Interest Revenue

	EXPENSES
510	Cost of Merchandise Sold
521	Delivery Expense
523	Depreciation Expense
539	Administrative Expenses
540	Selling Expenses