Question

Prepare a multiple-step income statement for Surry Co. from the following data for the year ended December 31, 2016. Sales $915,000 cost of merchandise sold $670,000 administrative expenses $30,000 interest expense $12,000 rent revenue $19,000 customer refunds and allowances $55,000 selling expenses $120,000

Answer 1

Answer:

                                          Surry Co.

Income Statement for the year ended December 31, 2016

Sales                                                                      $915000

Less Cost of Merchandise Sold                           $670000

Gross Profit                                                            $245000

LESS OPERATING INCOME

Selling Expenses

Customer Refunds and allowances   $  55000

Selling expenses                                 $ 120000  $175000

Administrative Expenses

Administrative expenses                     $ 30000   $30000

Total Operating expenses                                   $205000

Operating Income                                                 $ 40000

NON-OPERATING INCOME

Interest Expense                                 ($12000)    

Rent Revenue                                      $19000  

Total Non-operating Income                                 $  7000

Net Income                                                             $47000

Explanation:

A multiple-step Income Statement separate Operating Revenues and Operating Expenses from Non-Operating Revenues and Non-Operating Expense.