Prepare a multi-step income statement for the ZEBRA CORPORATION for the year end
ID: 2567290 • Letter: P
Question
Prepare a multi-step income statement for the ZEBRA CORPORATION for the year ending December 31, 2016, given the information below (clearly, indicate the balance amount in each step or sub-category, such as “Gross Profit,” etc.): [Hint: there may be more information than needed to construct the income statement. Critically think about each item that should or should not be included in the income statement.]
Advertising expenditures 78,000
Cost of goods sold 2,433,000
Depreciation 78,000
Gross sales 3,210,000
Interest expenses 64,000
Lease payment 52,000
Management salary 240,000
Material purchase 2,425,000
R&D expenditures 35,000
Repair and maintenance costs 22,000
Returns and allowances 48,000
Taxes 51,000
Treasury stock 20,000
Explanation / Answer
MULTI STEP INCOME STATEMENT
Operating Expenses
Non operating Expenses
Gross sales 3210000 less: returns and allowances 48000 3162000 cost of goods sold 2433000 Gross profit 729000Operating Expenses
advertising 78000 depreciation 78000 management salary 240000 R&D expenditure 35000 repairs & maintenance 22000 453000 Operating income 276000Non operating Expenses
interest 64000 lease payment 52000 116000 Income before tax 160000 Tax 51000 Net income $109000