Income Statement Exercise 1: Placement in a Multiple-Step Income Statement Use t
ID: 2340586 • Letter: I
Question
Income Statement
Exercise 1: Placement in a Multiple-Step Income Statement
Use the codes below to indicate where each item would appear in a Multiple-Step Income Statement prepared for the period ending December 31.
A. Operating Revenues
B. Operating Expenses
C. Other Revenue and Gains
D. Other Expenses and Losses
E. Separately reported items below “Income from Continuing Operations”
X. Would not appear on an Income Statement
Account
Placement
1
Accounts Receivable
2
Accumulated Depreciation
3
Administrative Expenses
4
Cost of Goods Sold
5
Depreciation Expense
7
Gain on Sale of Investments
8
Income Tax Expense
9
Interest Expense
10
Interest Income
11
Loss for Inventory Write-Down
12
Loss on Sale of Discontinued Operations
13
Loss on Sale of Land
14
Patent
15
Prepaid Insurance
16
Rent Revenue
18
Research and Development
19
Restructuring Costs
20
Sales Revenue
21
Selling Expense
22
Unearned Rent Revenue
Exercise 2: Completing a Multiple-Step Income Statement
The following selected account balances were taken from the trial balance of Dallas Corporation as of June 30, 2018. All accounts have normal balances.
Sales $1,678,500
Sales Discounts 31,150
Common Stock 1,300,000
Salaries Expense – Sales 61,110
Depreciation Expense – Office Furniture 7,250
Equipment 880,360
Travel Expense – Sales 28,930
Freight-Out (Delivery Costs) 21,400
Depreciation Expense – Sales Equipment 4,980
Retained Earnings, July 1, 2017 2,450,000
Utilities Expense – Office 9,130
Wage Expense – Office 136,700
Interest Expense 18,990
Miscellaneous Expense -- Office 6,000
Dividend Revenue 38,000
Allowance for Doubtful Accounts 45,000
Cost of Goods Sold 1,043,845
Additional Information:
In March, 2018, the corporation discontinued the operations of its publishing division (a major component of its business). During the current fiscal year, the publishing division had an operating loss of $110,000 and its assets were sold at a gain of $890,400.
The corporation had a $20,000 loss on the sale of a manufacturing facility (not related to the discontinued publishing division).
The tax rate which applies to all items is 30%.
There were 80,000 shares of common stock outstanding throughout the year.
Instructions: On the next two pages, fill in the yellow highlighted spaces to complete the multiple-step income statement for Dallas Corporation for the year ended June 30, 2018.
Continued
Account
Placement
1
Accounts Receivable
2
Accumulated Depreciation
3
Administrative Expenses
4
Cost of Goods Sold
5
Depreciation Expense
7
Gain on Sale of Investments
8
Income Tax Expense
9
Interest Expense
10
Interest Income
11
Loss for Inventory Write-Down
12
Loss on Sale of Discontinued Operations
13
Loss on Sale of Land
14
Patent
15
Prepaid Insurance
16
Rent Revenue
18
Research and Development
19
Restructuring Costs
20
Sales Revenue
21
Selling Expense
22
Unearned Rent Revenue
Explanation / Answer
Use the codes below to indicate where each item would appear in a Multiple-Step Income Statement prepared for the period ending December 31.
Note : Pleasse post next question individually for answer as per chegg policy
Account receivable X Accumulated Depreciation X Administrative Expenses B Cost of goods sold B Depreciation Expense B Gain on Sale of Investments C Income Tax Expense B Interest Expense D Interest income C Loss for Inventory Write-Down B Loss on Sale of Discontinued Operations E Loss on Sale of Land D Patents X Prepaid Insurance X Rent revenue C Research and Development B Restructuting cost B Sales Revenue A Selling expense B Unearned Rent Revenue X