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CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 15-1 Preparing an Income Statement Uses of financial statements Income statement information on a work sheet Income statement for a merchandising business
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CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning Competency: Understanding the Accounting Cycle for a Merchandising Business 2 LESSON 15-1 Objectives: 66 Prepare financial statements for a merchandising business 67 Analyze financial statements for a merchandising business
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CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 3 LESSON 15-1 INCOME STATEMENT INFORMATION ON A WORK SHEET page 448
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CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 4 LESSON 15-1 6.Contra account amounts REVENUE SECTION OF AN INCOME STATEMENT FOR A MERCHANDISING BUSINESS 1 2 34 5 67 89 1.Heading 7.Contra account total 3.Title of revenue account 8.Net Sales 4.Sales amount9.Net sales amount 5.Less contra accounts 2.Revenue section page 449
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CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 5 LESSON 15-1 COST OF MERCHANDISE SOLD SECTION OF AN INCOME STATEMENT FOR A MERCHANDISING BUSINESS 1 2 3 page 450 4 6 5 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
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CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 6 LESSON 15-1 COMPLETING AN INCOME STATEMENT FOR A MERCHANDISING BUSINESS 1 2 4 5 page 452 7 3 6 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
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CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 7 LESSON 15-1 TERMS REVIEW net sales cost of merchandise sold gross profit on sales page 454
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