Problem 14.3A Reconstructing an income statement to reflect proper accounting principles. LO 14-5, 14- Samuel Cox, owner of Cox Video Center, sent the income statement shown below to several of his creditors who had asked for financial statements. The business is a sole proprietorship that sells audio and other electronic equipment. One of the creditors looked Over the income tatement and reported that did not conform generaced o ng Cost of Goods Sold 577,000 Cost of Good old Operating Expenses SalarioPployees Salary of Dunn office Expen Depreciation Expense Income Tax of Owner Advertising and other s pen p ense utid Talephone Landen tout 33.33 points L UCU d e ested selling price. The cost of the ending inventory is determined to be $49,500, and the cost of the beginning Inventory is determined at $45.800. d. On January 1, 2019, suppliers of merchandise were owed $40,200, while on December 31, 2019, these debts were $46,425. e. The owner paid himself a salary of $2,600 per month from the funds of the business and charged this amount to an account called Salary of Owner. f. The owner also withdrew cash from the firm's bank account to pay himself $4.900 interest on his capital Investment. This amount was charged to Interest Expense g. A check for $9,000 to cover the owner's personal income tax for the previous year was issued from the firm's bank account. This was charged to Income Tax of Owner. h. Depreciation on assets was computed at 8 percent of the gross profit. An analysis of assets showed that the original cost of the equipment and fixtures was $67,500. Their estimated useful life is 12 years with no salvage value. The building cost $152.750. Its useful life is expected to be 25 years with no salvage value. i. Included in Repairs Expense was $6,600 paid on December 22 for a new parking lot completed that day. J. The increase in land value was based on an appraisal by a qualified real estate appraiser. eBook Print References Required: Prepare an income statement in accordance with generally accepted accounting principles Analyze: What is the gross profit percentage based on the income statement you prepared? Complete this question by entering your answers in the tabs below. Income Stint Analyze Prepare an income statement in accordance with generally accepted accounting principles Problem 14.3A Reconstructing an income statement to reflect proper accounting principles. LO 14-5, 14- Samuel Cox, owner of Cox Video Center, sent the income statement shown below to several of his creditors who had asked for financial statements. The business is a sole proprietorship that sells audio and other electronic equipment. One of the creditors looked Over the income tatement and reported that did not conform generaced o ng Cost of Goods Sold 577,000 Cost of Good old Operating Expenses SalarioPployees Salary of Dunn office Expen Depreciation Expense Income Tax of Owner Advertising and other s pen p ense utid Talephone Landen tout 33.33 points L UCU d e ested selling price. The cost of the ending inventory is determined to be $49,500, and the cost of the beginning Inventory is determined at $45.800. d. On January 1, 2019, suppliers of merchandise were owed $40,200, while on December 31, 2019, these debts were $46,425. e. The owner paid himself a salary of $2,600 per month from the funds of the business and charged this amount to an account called Salary of Owner. f. The owner also withdrew cash from the firm's bank account to pay himself $4.900 interest on his capital Investment. This amount was charged to Interest Expense g. A check for $9,000 to cover the owner's personal income tax for the previous year was issued from the firm's bank account. This was charged to Income Tax of Owner. h. Depreciation on assets was computed at 8 percent of the gross profit. An analysis of assets showed that the original cost of the equipment and fixtures was $67,500. Their estimated useful life is 12 years with no salvage value. The building cost $152.750. Its useful life is expected to be 25 years with no salvage value. i. Included in Repairs Expense was $6,600 paid on December 22 for a new parking lot completed that day. J. The increase in land value was based on an appraisal by a qualified real estate appraiser. eBook Print References Required: Prepare an income statement in accordance with generally accepted accounting principles Analyze: What is the gross profit percentage based on the income statement you prepared? Complete this question by entering your answers in the tabs below. Income Stint Analyze Prepare an income statement in accordance with generally accepted accounting principles
