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Acc 290 Week 3 Individual Assignment Text

Answer:SIMON COMPANYIncome StatementFor the Year Ended December 31, 2017Sales       Sales Revenue   911,000  Less:Sales Returns/Allowances 28,000    Sales Discounts  18,000 46,000  Net Sales    865,000 Cost of goods sold    555,000 Gross profit    310,000 Operating expenses      Salaries and wages expense  136,000   Freight out  33,000   Rent Expense  18,000   Advertising expense  13,000   Utilities expense  12,000   Depreciation expense  10,000    Total operating expenses   222,000 Income from Operations   88,000 Other revenues and gains       Rent revenue   4,000 Other expenses and losses     Interest Expense   2,000 Income before income taxes   90,000 Income tax expense    22,500 Net income    67,500                                           

Purpose of Assignment The purpose of this assignment is to help you become familiar with the parts of the multiple‐step income statement. Assignment Steps Resources:Financial Accounting: Tools for Business Decision MakingScenario: An inexperienced accountant prepared this condensed income statement for Simon Company, a retail firm that has been in business for a number of years.SIMON COMPANYIncome StatementFor the Year Ended December 31, 2017RevenuesNet sales$850,000Other revenues22,000872,000Cost of goods sold555,000Gross profit317,000Operating expensesSelling expenses109,000Administrative expenses103,000212,000Net earnings$105,000As an experienced, knowledgeable accountant, you review the statement and determine the following facts:1.Net sales consist of: sales $911,000, less freight-out on merchandise sold $33,000, and sales returns and allowances $28,000.2.Other revenues consist of sales discounts $18,000 and rent revenue $4,000.3.Selling expenses consist of salespersons' salaries $80,000, depreciation on equipment $10,000, advertising $13,000, and sales commissions $6,000. The commissions represent