CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

LESSON 15-1LESSON 15-1

Preparing an Income Statement

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

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LESSON 15-1

TERMSTERMS

net sales – Total sales less sales discount and sales returns and allowances

cost of merchandise sold – Original price of merchandise sold during fiscal period

gross profit on sales – revenue remaining after cost of merchandise sold has been deducted

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CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

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LESSON 15-1

INCOME STATEMENT INFORMATION INCOME STATEMENT INFORMATION ON A WORK SHEETON A WORK SHEET page 448

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

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LESSON 15-1

6. Contra account amounts

REVENUE SECTION OF AN INCOME STATEMENT REVENUE SECTION OF AN INCOME STATEMENT FOR A MERCHANDISING BUSINESSFOR A MERCHANDISING BUSINESS

11

22

33 44

55

66 7788 99

1. Heading

7. Contra account total

3. Title of revenue account 8. Net Sales

4. Sales amount 9. Net sales amount

5. Less contra accounts

2. Revenue section

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CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

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LESSON 15-1

COST OF MERCHANDISE SOLD SECTION OF AN COST OF MERCHANDISE SOLD SECTION OF AN INCOME STATEMENT FOR A MERCHANDISING INCOME STATEMENT FOR A MERCHANDISING BUSINESSBUSINESS

11

2233

page 450

446655

1. Cost of Merchandise Sold section

2. Beginning inventory

3. Purchases section

4. Total cost of merchandise available for sale

5. Ending inventory

6. Cost of merchandise sold

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

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LESSON 15-1

COMPLETING AN INCOME STATEMENT COMPLETING AN INCOME STATEMENT FOR A MERCHANDISING BUSINESSFOR A MERCHANDISING BUSINESS

11

22

44

55

page 452

77

3366

7. Component percentage

6. Double lines

5. Net Income after Federal Income Tax

4. Less Federal Income Tax Expense

3. Net Income before Federal Income Tax

2. Expenses section

1. Gross Profit on Sales