Presented below is information for Sheridan Company for the

Presented below is information for Sheridan Company for the month of January 2017.

Cost of goods sold	$204,300	Rent expense	$32,300
Freight-out	6,100	Sales discounts	8,900
Insurance expense	13,800	Sales returns and allowances	17,500
Salaries and wages expense	62,000	Sales revenue	397,500
Income tax expense	5,500	Other comprehensive income (net of $400 tax)	2,000

Computation of taxable profit and the amount of tax.

Particulars

Amount ($)

Incomes:

Sales revenue

397,500.00

Less: Sales return and allowances

17,500.00

380,000.00

Less: Sales discount

8,900.00

371,100.00

Other comprehensive income gross (2000 +400)

2,400.00

373,500.00

Expenditures:

Cost of goods sold

204,300.00

Freight out

6,100.00

Insurance expense

13,800.00

Salaries and wages

62,000.00

Rent expense

32,300.00

318,500.00

Profit before tax

55,000.00

Less: Tax @30% (55000 x 30%)

16,500.00

Profit after tax

38,500.00

Note: The income tax on the profit is calculated taking into consideration that the applicable rate of income tax on the amount of profit is 30%.

Particulars	Amount ($)	Amount ($)
Incomes:
Sales revenue	397,500.00
Less: Sales return and allowances	17,500.00
	380,000.00
Less: Sales discount	8,900.00
		371,100.00
Other comprehensive income gross (2000 +400)	2,400.00
		373,500.00
Expenditures:
Cost of goods sold	204,300.00
Freight out	6,100.00
Insurance expense	13,800.00
Salaries and wages	62,000.00
Rent expense	32,300.00
		318,500.00
Profit before tax	55,000.00
Less: Tax @30% (55000 x 30%)	16,500.00
Profit after tax	38,500.00