Question

On October 31, 2019, the balances of the accounts appearing in the ledger of Prestige Furnishings Company, a furniture wholesaler, are as follows:
Accumulated Depreciation-Building $746,350
Administrative Expenses 515,750
Building 2,419,500
Cash 168,150
Common Stock 300,500
Cost of Merchandise Sold 3,925,500
Dividends 179,100
Interest Expense 9,950
Merchandise Inventory 1,020,900
Notes Payable 259,350
Office Supplies 19,150
Retained Earnings 1,343,400
Salaries Payable 7,600
Sales 6,144,850
Selling Expenses 732,500
Store Supplies 92,700

Required:
Prepare a multiple-step income statement for the year ended March 31, 2019. Be sure to complete the heading of the statement. Refer to the information given in the exercise and to the list of Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries. In the Other expenses section only, enter amounts that represent other expenses as negative numbers using a minus sign.

Answer 1

Answer:

Multiple-step income statement for the year ended 31, 2019

Sales                                                                         6,144,850

Less Cost of Merchandise Sold                            (3,925,500)

Gross Profit                                                               2,219,350

Less Operating Expenses :

Administrative Expenses               (515,750)

Selling Expenses                           (732,500)

Office Supplies                                 (19,150)

Store Supplies                                 (92,700)          (1,360,100)

Operating Income                                                      859,250

Less Non- Operating Expenses :

Interest Expense                              (9,950)                (9,950)

Net Income                                                                 849,300

Explanation:

Multiple-step income statement show separately Income derived from Primary Activities of the Entity (Operating) and those Income derived from the Secondary Activities of the Entity (Non-Operating).