Question

Context:

Barto Company provides this information for the month ended October 31, 2017: sales on credit $300,000, cash sales $150,000, sales discounts $5,000, and sales returns and allowances $19,000. Prepare the sales section of the income statement based on this information.

Only this part:

Explain where each of these items would appear on a multiple-step income statement: gain on disposal of plant assets, cost of goods sold, depreciation expense, and sales returns and allowances.

Answer 1

BARTO COMPANY
Income Statement (partial)
For the Month Ended December 31, 2017
Revenues:
Sales revenue     [Sales on credit + Cash sales = $300,000 + $150,000]		$450,000
Less:
Sales discount	$5,000
Sales returns and allowances	$19,000
		$24,000
Net sales                                     [$450,000 - $24,000]		$426,000

.

.

Gain on disposal of plant assets	Other Revenues and Gains
Cost of goods sold	Cost of Goods Sold
Depreciation expense	Operating Expenses
Sales returns and allowances	Revenue or Sales revenue