Cole\'s Cookie Company Unadjusted Trial Balance (Selected Accounts) For the Curr
ID: 2438812 • Letter: C
Question
Cole's Cookie Company
Unadjusted Trial Balance (Selected Accounts)
For the Current Year Ended
Account
Debit
Credit
Common Stock (no par): Beginning Balance
$
472,000
Retained Earnings: Beginning Balance
1,600,000
Accumulated Other Comprehensive Income: Beginning Balance
$
55,000
Dividends
67,000
Sales
2,400,000
Interest Income
4,600
Dividend Income
3,800
Gain on Disposal of Plant Assets
92,000
Unrealized Gain on Trading Securities
31,000
Gain on Sale of Discontinued Operations-Before Tax
66,000
Unrealized Gain on Available-for-Sale Bonds-Before Tax
5,300
Cost of Goods Sold
610,000
Selling Expenses
41,000
Office Salaries Expense
75,000
Legal Fees-General
8,200
Sales Salaries Expense
33,000
Advertising Expense
35,000
Office Supplies Expense
72,000
Accounting Fees-Administrative
14,000
Amortization Expense-General
28,000
Depreciation Expense-General
35,000
Interest Expense
8,100
Loss on Asset Impairment
9,200
Above is the Year end trial balance
Cookie Company provided the following accounts from its? year-end trial balance.
The company is subject to a 45?% income tax rate.
Requirement
Prepare a? multiple-step income statement for the current year.
Cole's Cookie Company
Unadjusted Trial Balance (Selected Accounts)
For the Current Year Ended
Account
Debit
Credit
Common Stock (no par): Beginning Balance
$
472,000
Retained Earnings: Beginning Balance
1,600,000
Accumulated Other Comprehensive Income: Beginning Balance
$
55,000
Dividends
67,000
Sales
2,400,000
Interest Income
4,600
Dividend Income
3,800
Gain on Disposal of Plant Assets
92,000
Unrealized Gain on Trading Securities
31,000
Gain on Sale of Discontinued Operations-Before Tax
66,000
Unrealized Gain on Available-for-Sale Bonds-Before Tax
5,300
Cost of Goods Sold
610,000
Selling Expenses
41,000
Office Salaries Expense
75,000
Legal Fees-General
8,200
Sales Salaries Expense
33,000
Advertising Expense
35,000
Office Supplies Expense
72,000
Accounting Fees-Administrative
14,000
Amortization Expense-General
28,000
Depreciation Expense-General
35,000
Interest Expense
8,100
Loss on Asset Impairment
9,200
Explanation / Answer
Multiple-step Income statement:
Mulitiple-step income statement segregates Operating Income and Operating Expenses from Non-Operating Income and Non-Operating Expenses, gains and Losses.
Multiple -Step Income statement for the current year
Cole's Cookie Company
Statement of Net Income
For the current year ended
Note 1:
Unrealized gain on Available for sale bonds shall not be taken into income statement and instead it shall be presented in balance sheet under "Other comprehensive Income".
Note 2:
Dividend income is not an expense and morever it is an appropriation of income
Cole's Cookie Company
Statement of Net Income
For the current year ended
$ $ Sales 2,400,000 Cost Of Goods Sold 610,000 Gross profit 1,790,000 Operating expenses General and Administrative expenses Office salaries expenses 75,000 Legal fees 8,200 Office supplies expenses 72,000 Accounting fees 14,000 Amortization expenses 28,000 Depreciation expenses 35,000 232,200 Sales Expenses Selling expenses 41,000 Advertising expenses 35,000 Sales Salaries expenses 33,000 109,000 Total Operating expenses 341,200 Net Operating Income 1,448,800 Non-Operating Income and Expenses Interest income 4,600 Dividend income 3,800 Gain on disposal of Plant assets 92,000 Unrealized gain on trading securities 31,000 Gain on sale of discontinued operations 66,000 Interest expense (8,100) Loss on asset Impairment (9,200) Net Non-Operating income 180,100 Income before Income tax 1,628,900 Income tax @45% 733,005 Net Income 895,895