The document discusses how to prepare an income statement and analyze its components. It provides an example of calculating the cost of merchandise sold percentage by dividing the cost of merchandise sold by net sales. Preparing and analyzing income statements is important for understanding a company's profitability.

1. LESSON 22-2
Preparing an Income
Statement
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

2. 2
INCOME STATEMENT
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
page 645
LESSON 22-2

3. 3
INCOME STATEMENT
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
page 645
LESSON 22-2

4. 4
INCOME STATEMENT
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
page 645
LESSON 22-2

5. 5
ANALYZING AN INCOME STATEMENT
page 647
Cost of
Merchandise
Sold
÷
Net Sales
=
Cost of Merchandise
Sold Component
Percentage
$1,190,794.80
÷
$2,078,876.70
=
57.3%
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
LESSON 22-2

6. 5
ANALYZING AN INCOME STATEMENT
page 647
Cost of
Merchandise
Sold
÷
Net Sales
=
Cost of Merchandise
Sold Component
Percentage
$1,190,794.80
÷
$2,078,876.70
=
57.3%
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
LESSON 22-2