Question

Prepare a multiple-step income statement for Armstrong Co. from the following data for the year ended December 31. Sales, $755,000; cost of merchandise sold, $330,000; administrative expenses, $35,000; interest expense, $30,000; rent revenue, $25,000; selling expenses, $50,000. Armstrong Co. Income Statement For the Year Ended December 31 $ Gross profit $ Operating expenses: $ Total operating expenses $ Other revenue and expense: $ $

Answer 1

Answer:

See explanation

Explanation:

                       Armstrong Co.

          Multi-step Income Statement

  For the year ended, December 31, 20YY

Sales                                              $755,000

Less: Cost of merchandise sold   (330,000)

Gross Profit                                                    $425,000

Less: Operating expenses

Administrative expenses  $35,000

Selling expenses               $50,000

Total operating expenses                               $85,000

Income from operation                                 $340,000

Other revenue and expenses:

Rent Revenue                    $25,000

interest expense               ($30,000)

Total other revenues (expenses)                      $(5,000)

Income before taxes                                      $335,000

Less: Income Tax                                                     0

Net Income (loss)                                           $335,000

That is the appropriate way to prepare a multi-step income statement