KARLA COMPANY

Income Statemnet
Year ended December 31
Note
Net Sales 1 7,700,000
Cost of Good Sold 2 5,000,000
Gross Income 2,700,000
Other income 3 400,000
Total Income 3,100,000
Expenses
Selling Expenses 4 950,000
Administrative Expense 5 800,000
Other Expense 6 100,000 1,850,000
Income before Tax 1,250,000
Income Tax Expense 250,000
Net Income 1,000,000
 Note 1- Net Sales
Sales 7,850,000
Sales Return and Allowances -140,000
Sales Discount -10,000
Net Sales 7,700,000

Note 2- Cost of Good Sold

Inventory, Jan 1, 1,000,000
Purchases 5,250,000
Frieght In 500,000
Total 5,750,000
Purchase Return and Allowances -150,000
Purchase Discount -100,000 5,500,000
Goods Available for Sale 6,500,000
Inventory, Dec 31 1,500,000
Total Cost of Sales 5,000,000

Note 3: Other Income

Rental Income 250,000
Dividend Revenue 150,000
Total Other Income 400,000
 Note 4- Selling Expenses
Frieght Out 175,000
Sale's Commission 650,000
Depreciation- Store Equipment 125,000
Total Selling Expense 950,000

Note 5- Administrative Expense

Officers Salaries 500,000
Depreciation- Office Equipment 300,000
Total Administrative Expense 800,000

Note 6- Other Expenses

Loss on sale of equipment 50,000
Loss on sale of investment 50,000
Total Other Expense 100,000
 KARLA COMPANY
Income Statement
Year ended December 31
Note
Net Sales 1 7,700,000
Other Income 2 400,000
Total Income 8,100,000
Expenses:
Increase in inventory 3 -500,000
Net Purchase 4 5,500,000
Freight Out 175,000
Sales commission 650,000
Depriciation 5 425,000
Office Salaries 500,000
Other Expenses 6 100,000 6,850,000
Income before Tax 1,250,000
Income Tax Expense 250,000
Net Income 1,000,000
 Note 1- Net Sales Note 5 Depriciation
Sales 7,850,000 Depriciation- Store Equipment
Sales Return and Allowances -140,000 Depriciation- Office Equipmnet
Sales Discount -10,000 Total Depriciation
Net Sales 7,700,000
Note 6- Other Expense
Note 2- Other Income Loss on sale of Equipment
Rental Income 250,000 Loss on sale on investment
Dividend Revenue 150,000 Total other expense
Total Other Income 400,000

Note 3- Increase Inventory

Inventory Jan 1 1,000,000
Inventory Dec 1 1,500,000
Total Increase Inventory -500,000

Note 4 - Net Purchase

Purchase 5,250,000
Frieght In 500,000
Purchase Return and Allowances -150,000
Purchase Discount -100,000
Net Purchase 5,500,000
5 Depriciation
125,000
300,000
425,000

Other Expense
50,000
50,000
100,000
 Karla Company
Cost of Goods Manufactured

Raw Materials, Jann 1 ₱ 200,000

Purchases ₱ 3,000,000
Raw materials available for use ₱ 3,200,000
Raw materials , Dec 31 -₱ 280,000
Raw materials used ₱ 2,920,000
Direct Labor ₱ 950,000
Factory overhead
Indirect labor ₱ 250,000
Superintendance ₱ 210,000
Light , heat and power ₱ 320,000
Rent- facotry building ₱ 120,000
Repair and maintencance ₱ 50,000
Factory Supplies used ₱ 110,000
Depreciation- machinery ₱ 60,000 ₱ 1,120,000
Total manufacturing cost ₱ 4,990,000
Goods in Process Jan1 ₱ 240,000
Total cost of goods in process ₱ 5,230,000
Less: Goods in process Dec 31 ₱ 170,000
Cost of Good Sold ₱ 5,060,000
 KARLA COMPANY
Income Statement
Year ended December 31 20A
Note
Net sales 1 ₱ 7,450,000
Cost of goods sold 2 ₱ 5,120,000
Gross Income ₱ 2,330,000
Other income 3 ₱ 210,000
Total Income ₱ 2,540,000
Expenses:
Distribution Cost 4 ₱ 830,000
Adminitrative Cost 5 ₱ 590,000
Other expenses 6 ₱ 300,000 ₱ 1,720,000
Income before tax ₱ 820,000
Income tax expense ₱ 320,000
Net Income ₱ 500,000

Note 1- Net Sales

Sales ₱ 7,500,000
Sales return and allowances ₱ 50,000
Net Sales ₱ 7,450,000

Note 2- Cost of Goods Sold

Finished Goods Jan1 ₱ 360,000
Cost of Goods manufactured ₱ 5,060,000
Goods available for sales ₱ 5,420,000
Finished Goods Dec 31 ₱ 300,000
Cost of goods sold ₱ 5,120,000

Note 3- Other Income

Gain on sale of equipment ₱ 100,000
Gain from expropriation of asset ₱ 100,000
Interest income ₱ 10,000
Other income ₱ 210,000

Note 4- Distribution Cost

Sales Salaries ₱ 400,000
Depreciation- store equipment ₱ 70,000
Advertising ₱ 160,000
Delivery Expense ₱ 200,000
Distribution Cost ₱ 830,000

Note 5- Administrative Cost

Office Salaries ₱ 150,000
Depreciation- office equipment ₱ 40,000
Accounting and legal fees ₱ 150,000
Office expenses ₱ 250,000
Adminitrative Cost ₱ 590,000

Note 6- Other Expenses

Earthquake loss ₱ 300,000
 KARLA COMPANY
Income Statement
Year ended December 31 20A

Note
Net sales 1
Other Income 2
Total Income
Expenses
Decrease in Finshed Goods 3 ₱ 60,000
Decrease in Goods in process ₱ 70,000
Raw Materials used 4 ₱ 2,920,000
Factory Overhead 5 ₱ 1,120,000
Salaries 6 ₱ 550,000
Depreciation 7 ₱ 110,000
Direct Labor 8 ₱ 950,000
Advertising ₱ 160,000
Delivery Expense ₱ 200,000
Accounting and legal fees ₱ 150,000
Office Expense ₱ 250,000
Other Expense ₱ 300,000
Income before Tax
income tax Expense
Net Income
 Note 1- Net Sales
Sales ₱ 7,500,000
A Sales return and allowances ₱ 50,000
Net Sales ₱ 7,450,000

₱ 7,450,000 Note 2- Other Income

₱ 210,000 Gain on sale-equpitment ₱ 100,000
₱ 7,660,000 Gain from expropriation ₱ 100,000
Interest Income ₱ 10,000
Total Other income ₱ 210,000

Note 3- decrease in finished goods

Finished Goods Jan 1 ₱ 360,000
Finished Goods Dec 31 ₱ 300,000
Decrease finished goods ₱ 60,000

Good in process Jan1 ₱ 240,000

Good in process dec 31 ₱ 170,000
Decrease in Goods in process ₱ 70,000

₱ 6,840,000 Note 4- Raw materials

₱ 820,000 Raw Materials, Jann 1 ₱ 200,000
₱ 320,000 Purchases ₱ 3,000,000
₱ 500,000 Raw materials available for use ₱ 3,200,000
Raw materials , Dec 31 -₱ 280,000
Raw materials used ₱ 2,920,000

Note 5- Factory overhead

Indirect labor ₱ 250,000
Superintendance ₱ 210,000
Light , heat and power ₱ 320,000
Rent- facotry building ₱ 120,000
Repair and maintencance ₱ 50,000
Factory Supplies used ₱ 110,000
Depreciation- machinery ₱ 60,000
Total Factory overhead ₱ 1,120,000
 Note 6- Salaries
Office Salaries ₱ 150,000
Sales Salaries ₱ 400,000
Total Salaries ₱ 550,000

Note 7- Depreciation
Depreciation- store equipment ₱ 70,000
Depreciation- office equipmtn ₱ 40,000
Total Depreciation ₱ 110,000

Note 8- other expense

Earthquake loss ₱ 300,000