Financial Statement Critical thinking

School: Academy of Healing Arts Massage and Facial Skin Care           Price: $10.00 USD

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In this module, you were introduced to the income statement and profitability ratios. In this assignment, you will use this information to create an income statement and then analyze it for profitability. Selected accounts for Jackson, Inc. are listed below along with their balances before closing the year of 12/31/12. Jackson, Inc. is a firm that manufactures wireless mouse systems for laptops. Use this information to complete the required elements below.



Interest expense
2,000

Sales revenue

297,000

Selling expenses

38,200





Administrative expenses

16,700

Cost of goods sold

162,300

Dividends1

12,200





Gain on sale of equipment

3,600

Loss from fire

7,500

Retained Earnings (1/1/12 balance)

335,000

Tax expense

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Academy of Healing Arts Massage and Facial Skin Care
1.The required multistep income statement should be prepared in the following manner.J Inc.Income StatementFor the year ended December 31, 2012AmountSales Revenue$ 297,000Less: Cost of Goods sold$ 162,300Gross Profit$ 134,700Operating Expenses:Administrative Expenses$ 16,700Selling Expenses$ 38,200Total operating expenses$ 54,900Operating income$ 79,800Other revenues and gains:Gain on sale of sale of equipment$ 3,600Other expenses and losses:Interest expense$ 2,000Loss from fire$ 7,500$ -9,500Income before taxes$ 73,900Income taxes$ -22,800Income after taxes$ 51,1002. Statement of retained earnings should be prepared as follows:J Inc.Statement of Retained EarningsFor the year ended December 31, 2012AmountBalance on January 1, 2012$ 335,000Add: Income after taxes$ 51,100$ 386,100Less: Dividend paid$ 12,200B
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