Question

Blossom Company's trial balance of income statement accounts only for the year ended December 31, 2020 included the following: Debit Credit Sales revenue $272000 Cost of goods sold $163000 Administrative expenses 39200 Loss on sale of equipment 17200 Commissions to salespersons 15200 Interest revenue 9800 Freight-out 6100 Loss from discontinued operations 24700 Bad debt expense 6100 Other information: Blossom's income tax rate is 30%. Finished goods inventory: January 1, 2020 $160100 December 31, 2020 138200 On Blossom's multiple-step income statement for 2020, The discontinued operations loss is

Answer 1

Answer:

Net Loss                                                                (11,600)

Explanation:

Blossom Company

Multiple-step Income Statement

For 2020

Sales revenue                                       $272000

Less Sales Returns ( $160100- 138200) (21900)

Less Freight-out                                         (6100 )

Net Sales                                           244,000

Less Cost of goods sold                   ($163000)

Gross Profit                                          $ 81,000

Less Administrative expenses               (39200)

Operating Income                                   41,800

Add other income

Interest revenue                               9800

Other Expenses (63,900)

Less Bad debt expense                            (6100)

Less Commissions to salespersons        (15200)

Loss on sale of equipment                       (17200)

Loss from discontinued operations          (24700)

Net Loss                                                                (11,600)

As there is a net loss it will be exempt from income tax.

Multi step income statement gives a detailed  information about the income at every stage , like the gross profit , operating profit , other income, other expenses , etc.