《会计专业英语》第四课课文(words)
Lesson FourIncome StatementIncome Statement is designed to portray the operating results for a period of time (e.g., for the month ended January 31, 2000). Exhibit 4-1 is the income statement of Douglas Trading Company for the month ended January 31 , 2000. The major categories of the income statement for a merchandising company are revenue, cost of goods sold and operating expenses. In the revenue section, sales returns and allowances and sales discounts are deducted from the gross sales to yield net sales. The cost of goods sold is obtained by adding the beginning inventory and net purchases and deducting the ending inventory. To calculate net purchases, we deduct purchases returns, allowances and discounts from the purchases amount and add transportation costs of purchased goods. By deducting the cost of goods sold from the net sales, we arrive at an intermediate amount called gross profit on sales. The operating expenses are then deducted from the gross profit on sales to obtain the net income for the period. The operating expenses of a merchandising business are typically classified into selling and administrative expenses. Some business items affecting the determination of a final net income amount may not relate to the primary operating activity of the business. Interest income and interest expense, for example, may be viewed as relating more to financing and investing activities than to merchandising efforts. They are often shown in a separate category called “Other Income and Expense” at the bottom of the income statement. Likewise, any extraordinary items, such as catastrophic loss from an earthquake, will be shown in a separate “Extraordinary Items” category before the final net income amount is figured. Douglas Trading Company had no transactions or events to list in either of these categories on its income statement. Operating results summarized by the income statement will be reflected in the owners’ equity section on the balance sheet at the end of that period. For yearly financial statements, the complementary relationship might be shown graphically as follow: Dec. 31, 1999 Year 2000 Dec. 31, 2000 Year 2001 Dec. 31, 2001BalanceSheet IncomeStatement IncomeStatement BalanceSheet
The financial statements illustrated in this text are all prepared on the accrual basis.(Exhibit 4-1)Douglas Trading CompanyIncome StatementFor The Month Ended January 31, 2000RevenueSales $512 000Less: Sales Returns and Allowances $2 000 Sales Discounts 10 000 12 000Net Sales $500 000Cost of Goods Sold Inventory, Jan. 1 $90 000 Add: Net PurchasesPurchases $410 000Less: Purchases Returns And Allowances $10000 Purchases Discounts 8 000 18 000 $392 000Add: Transportation In 6 000 398 000Cost of Goods Available for Sale $488 000Less: Inventory, Jan. 31 98 000Cost of Goods Sold 390 000Gross Profit on Sales $110 000Operating Expenses Selling Expenses Sales Salaries Expenses $30 000Transportation Out 16 200Advertising Expenses 2 500Depreciation Expenses 1 000Insurance Expense 300 Total Selling Expenses $50 000Administrative Expenses Rent Expenses $8 000 Office Salaries Expenses 10 000 Utilities Expenses 5 800Supplies Expenses 200 Total Administrative Expenses 24 000 Total Operating Expenses 74 000Net Income $36 000BalanceSheet