Instructions Prepare a multiple-step income statement; 100,0o0 shares of common
ID: 2432974 • Letter: I
Question
Instructions Prepare a multiple-step income statement; 100,0o0 shares of common stock were outstanding during the year E4-7 (LO2,3,4) (Multiple-Step and Single-Step Statements) The accountant of Latifa Shoe Co. has piled the following informati from the company's records as a basis for an income statement for the year ended December 31, 2017. Rent revenue Interest expense Market appreciation on land above cost Salaries and wages expense (selling) Supplies (selling) Income tax Salaries and wages expense (administrative Other administrative expenses Cost of goods sold Net sales Depreciation on plant assets (70% selling, 30% administrative) Cash dividends declared $29,000 18,000 31,000 114,800 17,600 37400 $135.900 51,700 496,000 980,000 65,000 16,000 There were 20,000 shares of common stock outstanding during the year.Explanation / Answer
Multiple-Step Form
Latifa Shoe Co Shoe Co.
Income Statement
For the Year Ended December 31, 2017
Net sales
$980,000
Cost of goods sold
496,000
Gross profit on sales
484,000
Operating Expenses
Selling expenses
Wages and salaries
$114,800
Depr. exp. (70% X $65,000)
45,500
Materials and supplies
17,600
$177,900
Administrative expenses
Wages and salaries
135,900
Other admin. expenses
51,700
Depr. exp. (30% X $65,000)
19,500
207,100
385,000
Income from operations
99,000
Other Revenues and Gains
Rental revenue
29,000
128,000
Other Expenses and Losses
Interest expense
18,000
Income before income tax
110,000
Income tax
37,400
Net income
$ 72,600
Earnings per share ($72,600 ÷ 20,000)
$3.63
(b) Single-Step Form
Latifa Shoe Co
Income Statement
For the Year Ended December 31, 2017
Revenues
Net sales
$ 980,000
Rental revenue
29,000
Total revenues
1,009,000
Expenses
Cost of goods sold
496,000
Selling expenses
177,900
Administrative expenses
207,100
Interest expense
18,000
Total expenses
899,000
Income before income tax
110,000
Income tax
37,400
Net income
$ 72,600
Earnings per share ($72,600 ÷ 20,000)
$3.63
Multiple-Step Form
Latifa Shoe Co Shoe Co.
Income Statement
For the Year Ended December 31, 2017
Net sales
$980,000
Cost of goods sold
496,000
Gross profit on sales
484,000
Operating Expenses
Selling expenses
Wages and salaries
$114,800
Depr. exp. (70% X $65,000)
45,500
Materials and supplies
17,600
$177,900
Administrative expenses
Wages and salaries
135,900
Other admin. expenses
51,700
Depr. exp. (30% X $65,000)
19,500
207,100
385,000
Income from operations
99,000
Other Revenues and Gains
Rental revenue
29,000
128,000
Other Expenses and Losses
Interest expense
18,000
Income before income tax
110,000
Income tax
37,400
Net income
$ 72,600
Earnings per share ($72,600 ÷ 20,000)
$3.63