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NetSolutions Income Statement (Multiple-Step) For the Year Ended December 31, 2002

NetSolutions Income Statement (Multiple-Step) For the Year Ended December 31, 2002. Revenue from sales: Sales $720,185 Less:Sales returns and allow. $ 6,140 Sales discounts 5,790 11,930 Net sales $708,255 Cost of merchandise sold 525,305 Gross profit $182,950. Continued.

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NetSolutions Income Statement (Multiple-Step) For the Year Ended December 31, 2002

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  1. NetSolutionsIncome Statement (Multiple-Step)For the Year Ended December 31, 2002 Revenue from sales: Sales $720,185 Less:Sales returns and allow. $ 6,140 Sales discounts 5,790 11,930 Net sales $708,255 Cost of merchandise sold 525,305 Gross profit $182,950 Continued

  2. Operating expenses: Selling expenses: Sales salaries expense $60,030 Advertising expense 10,860 Depr. expense–store equip. 3,100 Miscellaneous selling expense 630 Total selling expenses $ 74,620 Administrative expenses: Office salaries expense $21,020 Rent expense 8,100 Depr. expense–office equip. 2,490 Insurance expense 1,910 Office supplies expense 610 Misc. admin. expenses 760 Total admin. expenses 34,890 Total operating expenses 109,510 Income from operations $ 73,440 Continued

  3. Other income: Interest revenue $ 3,800 Rent revenue 600 Total other income $ 4,400 Other expense: Interest expense 2,440 1,960 Net income $75,400

  4. NetSolutionsIncome Statement (Single-Step)For the Year Ended December 31, 2002 Revenues: Net sales $708,255 Interest revenue 3,800 Rent revenue 600 Total revenues $712,655 Expenses: Cost of merchandise sold $525,305 Selling expenses 74,620 Administrative expenses 34,890 Interest expense 2,440 Total expenses 637,255 Net income $ 75,400

  5. NetSolutionsBalance SheetDecember 31, 2002 Assets Current assets: Cash $ 52,950 Notes receivable 40,000 Accounts receivable 60,880 Interest receivable 200 Merchandise inventory 62,150 Office supplies 480 Prepaid insurance 2,650 Total current assets $219,310 Continued

  6. NetSolutionsBalance SheetDecember 31, 2002 Property, plant, and equipment: Land $ 10,000 Store equipment $ 27,100 Less accum. depreciation 5,700 21,400 Office equipment $ 15,570 Less accum. depreciation 4,720 10,850 Total property, plant, and equipment 42,250 Total assets $261,560 Continued

  7. NetSolutionsBalance SheetDecember 31, 2002 Liabilities Current liabilities: Accounts payable $ 22,420 Note payable (current portion) 5,000 Salaries payable 1,140 Unearned rent 1,800 Total current liabilities $30,360 Long-term liabilities: Note payable (due 2004) 20,000 Total liabilities $ 50,360 Owner’s Equity Chris Clark, capital 211,200 Total liabilities and owner’s equity $261,560

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