ACC290 Phoenix Week 3 Simon Company Income Statement Analysis Purpose of Assignment The purpose of this assignment is to help you become familiar with the
ACC290 Phoenix Week 3 Simon Company Income Statement Analysis 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 Making
Scenario: 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 COMPANY
Income Statement
For the Year Ended December 31, 2017
Revenues
Net sales
$850,000
Other revenues
22,000
872,000
Cost of goods sold
555,000
Gross profit
317,000
Operating expenses
Selling expenses
109,000
Administrative expenses
103,000
212,000
Net earnings
$105,000
As an experienced, knowledgeable accountant, you review the statement and determine the following facts:
Net sales consist of: sales $911,000, less freight-out on merchandise sold $33,000, and sales returns and allowances $28,000.
Other revenues consist of sales discounts $18,000 and rent revenue $4,000.
Selling expenses consist of salespersons’ salaries $80,000, depreciation on equipment $10,000, advertising $13,000, and sales commissions $6,000. The commissions represent commissions paid. At December 21, $3,000 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 $47,000, dividends $18,000, utilities $12,000, interest expense $2,000, and rent expense $24,000, which includes prepayments totaling $6,000 for the first quarter of 2018.
Prepare a detailed multi-step income statement with a brief explanation of 700 words. Assume a 25% tax rate.
Show your work on the Excel® spreadsheet and submit with your explanation.
Click the Assignment Files tab to submit your assignment.
Faculty Materials Preparing a Multiple‐Step Income
Statement Grading Guide
ACC/290 Version 7
Principles of Accounting I
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Preparing a correct Multiple‐Step
Income Statement Grading Guide
ACC/290 Version 7
Individual Assignment: Preparing a correct Multiple‐Step Income Statement
Purpose of Assignment
The purpose of this assignment is to help you become familiar with the parts of the multiple‐step income
statement.
Resources Required
Financial Accounting: Tools for Business Decision Making.
Grading Guide
Content
Prepared a correct detailed multi-step income
statement, assuming a 25% tax rate, with a
brief explanation of 700 words.
Based the statement and explanation on the
following scenario:
An inexperienced accountant prepared this
condensed income statement for Simon
Company, a retail firm that has been in
business for a number of years.
Determined the following: Net sales consist of
sales $911,000, less freight-out on
merchandise sold $33,000, and sales returns
and allowances $28,000.
Determined the following: Other revenues
consist of sales discounts $18,000 and rent
revenue $4,000.
Met
Partially
Met
Not Met
Comments:
2
Preparing a correct Multiple‐Step
Income Statement Grading Guide
ACC/290 Version 7
Content
Met
Partially
Met
Not Met
Total
Available
Total
Earned
5
#/5
Partially
Met
Not Met
Total
Available
Total
Earned
3
#/3
8
#/8
Comments:
Selling expenses consist of salespersons’
salaries $80,000, depreciation on equipment
$10,000, advertising $13,000, and sales
commissions $6,000. The commissions
represent commissions paid. At December
21, $3,000 of commissions have been earned
by salespersons but have not been paid. All
compensation should be recorded as Salaries
and Wages Expense.
Determined the following: Administrative
expenses consist of office salaries $47,000,
dividends $18,000, utilities $12,000, interest
expense $2,000, and rent expense $24,000,
which includes prepayments totaling $6,000
for the first quarter of 2018.
Showed work.
Writing Guidelines
Met
The paper—including tables and graphs,
headings, title page, and reference page—is
consistent with APA formatting guidelines and
meets course-level requirements.
Intellectual property is recognized with in-text
citations and a reference page.
Paragraph and sentence transitions are
present, logical, and maintain the flow
throughout the paper.
Sentences are complete, clear, and concise.
Rules of grammar and usage are followed
including spelling and punctuation.
Assignment Total
#
Comments:
3
Preparing a correct Multiple‐Step
Income Statement Grading Guide
ACC/290 Version 7
Assignment Total
Additional comments:
#
8
#/8
4
Name
Section
Date
Problem 5-5A
Simon Company
SIMON COMPANY
Income Statement
For the Year Ended December 31, 2017
289
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