Question

Use the completed adjusted trial balance to prepare the income statement. Comprehensive Problem Part 2 Palisade Creek Co Income Statement

Income Statement 8.A. If you completed the end-of-period work sheet in Part 1, use the adjusted trial balance figures to prepare an income statement. If you didn't complete the end-of-period work sheet in Part 1, use the ledger (the Excel spreadsheet) to prepare an income statement. Be sure to complete the statement heading. If a ner loss is incurred, enter that amount as a negative number using a minus sign. Enteral other amounts as positive numbers. Refer to the problem data and the list of Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries. A colon () will automatically appear if it is required Palisade Creek Co. Income Statement (Label) Selling expenses: Administrative expenses:

Here are the approved labels if needed

Labels
Administrative expenses
Current assets
Current liabilities
For the Year Ended May 31, 2018
Long-term liabilities
May 31, 2018
Operating expenses
Property, plant, and equipment
Selling expenses
Amount Descriptions
Dividends
Cost of Goods Sold
Gross profit
Change in retained earnings
Net income
Net loss
Retained earnings, June 1, 2017
Retained earnings, May 31, 2018
Total administrative expenses
Total assets
Total current assets
Total liabilities
Total liabilities and stockholders’ equity
Total operating expenses
Total property, plant, and equipment
Total selling expenses
Total stockholders’ equity
CHART OF ACCOUNTS
Palisade Creek Co.
General Ledger
ASSETS 110 Cash 112 Accounts Receivable 115 Inventory 116 Estimated Returns Inventory 117 Prepaid Insurance 118 Store Supplies 123 Store Equipment 124 Accumulated Depreciation-Store Equipment LIABILITIES 210 Accounts Payable 211 Salaries Payable 212 Customers Refunds Payable EQUITY 310 Common Stock 311 Retained Earnings 312 Dividends 313 Income Summary	REVENUE 410 Sales EXPENSES 510 Cost of Goods Sold 520 Sales Salaries Expense 521 Advertising Expense 522 Depreciation Expense 523 Store Supplies Expense 529 Miscellaneous Selling Expense 530 Office Salaries Expense 531 Rent Expense 532 Insurance Expense 539 Miscellaneous Administrative Expense

Answer 1

Palisade Creek Co.
Income Statement
For the Year Ended May 31, 2018
Sales		$ 5,316,205
Less: Cost of goods sold		$ 2,991,950
Gross profit		$ 2,324,255
Selling expenses
Sales salaries expense	$ 727,800
Advertising expense	$ 292,000
Misc. selling expense	$    12,600
Total selling expense		$ 1,032,400
Administrative expense
Depreciation expense	$    14,000
Store supplies expense	$      9,800
Office salaries expense	$ 417,700
Rent expense	$    88,700
Insurance expense	$    12,000
Misc. administrative expense	$      7,800
Total administrative expenses		$     550,000
Net income		$     741,855

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