Question 10 An inexperienced accountant prepared this condensed income statement for Sunland Company, a retail firm that has been in business for a number of years. SUNLAND COMPANY Income Statement For the Year Ended December 31, 2017 Revenues Net sales $986,000 Other revenues 25,520 1,011,520 Cost of goods sold 643,800 Gross profit 367,720 Operating expenses Selling expenses 126,440 Administrative expenses 119,480 245,920 Net earnings $121,800 As an experienced, knowledgeable accountant, you review the statement and determine the following facts. 1 2 3. Net sales consist of sales $1,056,760, less freight-out on merchandise sold $38,280, and sales returns and allowances $32,480. Other revenues consist of sales discounts $20,880 and rent revenue $4,640. Selling expenses consist of salespersons' salaries $92,800, depreciation on equipment $11,600, advertising $15,080, and sales commissions $6,960. The commissions represent commissions paid. At December 31, $3,480 of commissions have been earned by salespersons but have not been paid. All compensation should be recorded as Salaries and Wages Expense. Administrative expenses consist of office salaries $54,520, dividends $20,880, utilities $13,920, interest expense $2,320, and rent expense $27,840, which includes prepayments totaling $6,960 for the first quarter of 2018. 4. Prepare a correct detailed multiple-step income statement. Assume a 25% tax rate. (List other revenues before other expenses. Round answers to 0 decimal places, e.g. 5,125. Enter negative amounts using either a negative sign preceding the number e.g.-45 or parentheses e.g. (45).) SUNLAND COMPANY Income Statement $