Practice Income Statement Questions

Need practice income statement questions? Here, you go, in this article you can find the number of income statement questions. 

Income Statement Definition

If you want to have information about the company’s income and expenses, then you should search for its Income statement. 

An income statement of the company reports its income (revenue & profit earned) and expenses( expenses incurred) over a specified period of time.

Practice questions

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Income Statement Practice Questions

Question: 1

For the fiscal year 2020, an income statement showed net sales of $1,000,000, cost of goods sold of $430,000, and overall operating expenses of $370,000.

  1. Calculate gross profit for the year 2020?
  2. Calculate the operating net profit for the year 2020?

Question: 2

The following data was gathered from different companies’ income statements for the year 2021.

 

X Company

Y Company

Z Company

Sales

$475,000

$800,000

?

Sales return & allowance

37,000

?

24,000

Sales discount

15,000

10,000

17,000

Net sales

?

750,000

?

Cost of goods sold

350,000

?

550,000

Gross profit

?

350,000

125,000

Question: 3

The following data was gathered from a portion of XYZ Company’s adjusted trail balance.

Sales

 

$800,000

Sales return & allowance

37,000

 

Sales discount

15,000

 

Cost of goods sold

415,000

 

Supplies expense

2,500

 

Salaries expense

28,000

 

Advertising expense

5,000

 

Depreciation expense

10,000

 

Interest expense

1,000

 

Required:

Prepare an income statement for the period ending 2021.

Question: 4

An adjusted trail balance was provided by Subhan Company as of December 31, 2019. On Jan 1st, the company possess merchandise inventory of $5,000.

Sales

 

$100,000

Sales return & allowance

800

 

Sales discount

1,000

 

Purchases

70,000

 

Insurance charges

6,000

 

Purchase discount

 

600

Freight in

400

 

Depreciation expense

2,000

 

Salaries expense

6,000

 

Merchandise inventory

20,000

 

Advertising expenses

1,000

 

Tax expense

7,500

 

Interest expense

1,000

 

Required:

Prepare an income statement for the period ending 2019.

Question: 5

The trial balance was taken from Bajaj’s accounts as of December 31, 2014.

Purchases & Sales

$97,500

$150,000

Carriage inwards

550

 

Discount allowed & discount received 

400

750

Carriage outwards

300

 

Return inwards and return outwards

4,000

3,500

Inventory as at 1 January 2014

16,000

 

Advertising

1,250

 

Dividend received

 

300

Rental

3,000

3,900

Bad debt

1,800

 

Salary expenses

9,000

 

Utilities expense

1,500

 

Insurance expense

2,000

 

Cash

2,600

 

Bank

7,600

 

Account receivables and account payables

50,000

68,000

Capital

 

154,950

Loan

 

90,000

Freehold premises

200,000

 

Furniture

8,000

 

Motor vehicles

52,000

 

Investment

32,000

 

Accumulated depreciation (furniture)

 

3,200

Accumulated depreciation (motor vehicle)

 

15,600

Drawing

1,200

             .

 

490,700

490,700

 

  1. Inventory as of 31 December 2014 was valued at $52,000.
  2. The rental received is for the period from Jan 2014 to 31 March 2015.
  3. $200 of utilities was paid in advance.
  4. The owner had withdrawn 1,300 in goods for his family’s use and no record was made.
  5. Additional bad debts of $1,100 were to be written off.
  6. Insurance amounting to $1,000 was still outstanding at the end of the accounting period.
  7. Depreciation is to be charged as follows:
    1. Furniture – 20% per annum on cost, straight-line method.
    2. Motor vehicles $5,200 per year.
  8. Interest on the loan at 5% per annum has not been paid.

Required:

Prepare an income statement for the period ending 2014.

Question: 6

The following data are related to Mr. Junaid after adjustment at Dec 31, XXXX:

  • Sales                                               $250,000
  • Merchandise inventory (opening)        10,000
  • Purchases 53,000
  • Commission income                              1,000
  • Sales discount                                       5,000
  • Junaid Drawing                                    19,000
  • Utility expense                                       4,000
  • Depreciation expense                            5,000
  • Bad debt expense                                  3,000
  • Salaries expense                                 10,000
  • Rent expense payable                         11,000
  • Allowance for bad debts                       11,000
  • Merchandise inventory (ending)           15,000

Required:

Prepare an income statement with the help of above data.

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