Prepare a Multi-step income statement from the following data: Income Statement
ID: 2414989 • Letter: P
Question
Prepare a Multi-step income statement from the following data:
Income Statement data:
Advertising expense$ 150,000
Cost of merchandise sold3,700,000
Delivery expense30,000
Depreciation expense-office buildings and equipment30,000
Depreciation expense-store buildings and equipment100,000
Dividend revenue4,500
Gain on sale of investments4,980
Income from Pinkberry Co. investment76,800
Income tax expense140,500
Interest expense21,000
Interest revenue2,720
Miscellaneous administrative expense7,500
Miscellaneous selling expense14,000
Office rent expense50,000
Office salaries expense170,000
Office supplies expense10,000
Sales5,254,000
Sales commissions185,000
Sales salaries expense385,000
Store supplies expense21,000
Income Statement data:
Advertising expense$ 150,000
Cost of merchandise sold3,700,000
Delivery expense30,000
Depreciation expense-office buildings and equipment30,000
Depreciation expense-store buildings and equipment100,000
Dividend revenue4,500
Gain on sale of investments4,980
Income from Pinkberry Co. investment76,800
Income tax expense140,500
Interest expense21,000
Interest revenue2,720
Miscellaneous administrative expense7,500
Miscellaneous selling expense14,000
Office rent expense50,000
Office salaries expense170,000
Office supplies expense10,000
Sales5,254,000
Sales commissions185,000
Sales salaries expense385,000
Store supplies expense21,000
Explanation / Answer
Income statement Sales $5,254,000 Less: cost of Merchandise sold ($3,700,000) Gross Profit $1,554,000 Operating Expenses: Selling Expenses Sales salaries expense $170,000 Sales Commission $185,000 Advertising Expenses $150,000 Depreciation expense-store buildings and equipment $100,000 Delivery expense $30,000 Store supplies expense $21,000 Miscellaneous selling expense $14,000 $670,000 Administrative expenses: Depreciation expense-office buildings and equipment $30,000 Miscellaneous administrative expense $7,500 Office rent expense $50,000 Office Salaries expense $170,000 Office Supplies Expenses $10,000 $267,500 Total operating expenses ($937,500) Income from operations $616,500 Other expenses and income Dividend revenue $4,500 Gain on sale of investments $4,980 Income from Pinkberry Co. investment $76,800 Interest expense ($21,000) Interest revenue $2,720 ($68,000) Income before income tax $548,500 Income tax ($140,500) Net Income $408,000