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Act 5

Bernadette Company reported total sales of $5.535 million for 2021 with $55,000 in sales returns, resulting in net sales of $5.48 million. Cost of goods sold was $3.5 million and operating expenses were $2.1 million, resulting in income before taxes of $88,000. After deducting $336,408 in income tax expense, net income was a loss of $248,408.

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147 views1 page

Act 5

Bernadette Company reported total sales of $5.535 million for 2021 with $55,000 in sales returns, resulting in net sales of $5.48 million. Cost of goods sold was $3.5 million and operating expenses were $2.1 million, resulting in income before taxes of $88,000. After deducting $336,408 in income tax expense, net income was a loss of $248,408.

Uploaded by

Unknowingly Anonymous
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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The following data were taken from the records of Bernadette Company for the year ended December

31, 2021:

Sales 5,590,000
Sales returns 55,000
Inventories, Jan 1:
Raw materials 131,000
Work in process 283,350
Finished goods 442,000
Inventories, Dec. 31:
Raw materials 145,500
Work in process 175,720
Finished goods 412,000
Direct labor 1,050,300
Purchases 2,051,500
Purchases returns 17,150
Purchases discounts 12,550
Freight in 8,250
Freight out 200,000
Sales salaries 445,000
Office salaries 155,000
Depreciation – factory building 44,000
Depreciation – office equipment 44,000
Depreciation – store equipment 77,000
Depreciation – machinery and equipment 25,500
Amortization – patents 33,000
Bad debts expense 20,000
Factory supplies expense 75,550
Indirect labor 35,300
Interest income 116,240
Factory light and power 65,000
Property, taxes and insurance – factory building 13,200
Royalties on production 13,200
Supervision expense 65,000
Tools expense 10,500
Miscellaneous factory expense 50,150
Income tax expense 336,408
Dividends paid 70,000

Required:
Prepare a statement of profit or loss

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