Question

North Company has completed all of its operating budgets. The sales budget for the year shows 50,160 units and total sales of $2,228,200. The total unit cost of making one unit of sales is $24. Selling and administrative expenses are expected to be $309,200. Interest is estimated to be $12,710. Income taxes are estimated to be $226,800. Prepare a budgeted multiple-step income statement for the year ending December 31, 2020.

Answer 1

Answer:

North Company

Budgeted multiple-step income statement for the year ending December 31, 2020

Sales of                                               $2,228,200

Cost of Goods Sold ($24 x 50,160)  ($1,203,840)

Gross Profit                                                               $1,024,360

Operating Expenses:

Selling and administrative expenses                     ($309,200)

Operating Income                                                    $715,160

Non-Operating Expenses:

Interest  Expense                                                     ($12,710)  

Operating Income before tax                                  $702,450

Income taxes                                                            ($226,800)

Operating Income after Tax                                     $475,650

Explanation:

Multi-step Income statement segregate the Operating Income and Expenses from non operating Income and Expense. It shows the gross profit and net operating income separately.