To prepare the income statement for ABC LTD for the year ended December 31, 2024, we will follow the standard format:
ABC LTD
Income Statement
For the Year Ended December 31, 2024
Sales Revenue:
Sales Revenue: $250,000
Less: Sales Returns: ($10,000)
Net Sales: $240,000
Cost of Goods Sold (COGS):
Opening Stock: $30,000
Add: Purchases: $100,000
Less: Closing Inventory: ($20,000)
COGS: $110,000
Gross Profit:
Net Sales: $240,000
Less: COGS: ($110,000)
Gross Profit: $130,000
Operating Expenses:
Sales Expenses: $40,000
Rent Expenses: $12,000
Utilities Expenses: $3,000
Depreciation Expenses: $5,000
Total Operating Expenses: $60,000
Operating Income:
Gross Profit: $130,000
Less: Total Operating Expenses: ($60,000)
Operating Income: $70,000
Other Income and Expenses:
Interest Income: $1,500
Interest Expenses: ($2,000)
Net Other Income: ($500)
Income Before Tax:
Operating Income: $70,000
Add: Net Other Income: ($500)
Income Before Tax: $69,500
Income Tax Expense:
Tax Rate: 20%
Income Tax Expense: $13,900
Net Income:
Income Before Tax: $69,500
Less: Income Tax Expense: ($13,900)
Net Income: $55,600
Summary
Net Income for the Year: $55,600