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3 years ago

What is an advantage of using the multiple-step income statement?

Business

2 answers:

riadik2000 [5.3K]3 years ago

7 0

Answer:

The major advantage of multiple step income statement is that it breaks down the operating revenues and the costs incurred in the business.

It shows separated Gross profit which can be calculated as: Sales - COGS.

Apart from that, it shows separate Operating Income: Gross Profit - Operating expenses.

Lastly, it shows Net income: Operating income + non operating income.

Hence, concluded that, multiple step income statement offers a greater and detailed picture as compared to single step income statement.

Hope this helps.

Good Luck buddy.

notsponge [240]3 years ago

7 0

Answer:

It clearly states the gross profit of a firm

Explanation:

Income statement can be defined as the earnings report or a profit and loss statement during a specific period of time. It is the summary of the fiscal operation of a firm during a time frame. The period of time could be quarterly or annually.

We have multiple step income statement produced by companies with specific business structure and single step income statement are produced by other companies.

Multiple step income statement has an advantage of helping firms to clearly state their gross profit.

Gross profit= Sales revenue - Cost of goods

It also gives insight to operating profit of a firm.

Operating Profit= Gross profit - operating expenses

Multiple step income statement helps to state all sources of income and expenditure of a firm.

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Answer:

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Explanation:

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3 years ago

What are three career pathways in the marketing cluster? A. Marketing Research, Professional Sales, and Merchandising B. Culinar

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Answer:

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2 years ago

If the elasticity of demand for Good A is −3, a 33 percent decrease in quantity demanded of Good A results from a(n) ________ in

velikii [3]

Answer:

Option (d) is correct.

Explanation:

Given that,

Elasticity of demand for Good A = −3

Percentage decrease in quantity demanded for Good A = 33%

Elasticity of demand for Good A = Percentage change in quantity demanded for Good A ÷ Percentage change in price of Good A

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3 years ago

Crystal Apple Sales Company began 2014 with cash of $2,000, inventory of $3,600 (200 crystal apples that cost $18 each), $2,500

Andru [333]

Answer and Explanation:

a. The computation of ending inventory and cost of goods sold using the three different cost flow assumptions: FIFO, LIFO, and Weighted Average is shown below:-

Cost of goods sold = (200 × $18) + (800 × $20) + (1,040 × (2,040-200-800)

= (200 × $18) + (800 × $20) + (1,040 × $24)

= $3,600 + $16,000 + $24,960

= $44,560

Ending Inventory Under FIFO = (1,200 - 1,040) × (2,040-200-800)

= 160 × $24

= $3,840

Under LIFO method

Cost of goods sold is

= (1,200 × $24) + (800 × $20) + (40 × $18)

= $28,800 + $16,000 + $720

= $45,520

Ending Inventory Under LIFO is

= (200 - 40) × $18

= 160 × $18

= $2,880

Weighted Average cost flow Assumption

Weighted Average cost per apple = Cost of Beginning inventory and purchase ÷ Total apple available

Cost of Beginning inventory and purchases is

= (200 × $18) + (800 × $20) + (1,200 × $24)

= $3,600 + $16,000 + $28,800

= $48,400

Total apples available is

= 200 + 800 + 1,200

= 2,200

Weighted Average cost per apple is

= $48,400 ÷ 2,200

= $22

Cost of goods sold is

= 2,040 × $22

= $44,880

Ending Inventory is

= 160 × $22

= $3,520

b. The Preparation of income statement, a balance sheet, and a statement of cash flows under each of the three cost flow assumptions is prepared below:-

Income Statement Amount

Sales (2,040 × $40) $81,600

Less: Cost of goods sold ($44,560)

Gross Profit $37,040

Less: Operating Expenses ($26,000)

Income before income taxes $11,040

Less: Income tax (30% × $11,280) ($3,312)

Net Income $7,728

Balance Sheet

Assets

Cash $9,488

Inventory $3,840

Total Assets $13,328

Liabilities and Stockholder's Equity

Common Stock $2,500

Retained Earnings $10,828

Total Liabilities and Equity $13,328

Working note

cash = (opening + Sales - Purchases - Operating expenses - Income tax expenses )

= $2,000 + $81,600 - $44,800 - $26,000 - $3,312

= $9,488

Retained earning = (Opening + Net Income)

= $3,100 + $7,728

= $10,828

Statement of Cash Flow

Cash Flow from Operating Activities

Cash Sales $81,600

Payment to Accounts Payable ($44,800)

Operating Expenses ($26,000)

Income tax paid ($3,312)

Net Increase in cash and

cash equivalents $7,488

Add: Opening Cash and

cash equivalents $2,000

Closing Cash and cash equivalents $9,488

LIFO cost flow Assumption

Income Statement

Sales (2,040 × $40) $81,600

Less: Cost of goods sold ($45,520)

Gross Profit $36,080

Less: Operating Expenses ($26,000)

Income before income taxes $10,080

Less: Income tax (30% × $10,080) ($3,024)

Net Income $7,056

Balance Sheet

Assets

Cash $9,776

Inventory $2,880

Total Assets $12,656

Liabilities and Stockholder's Equity

Common Stock $2,500

Retained Earnings $10,156

Total Liabilities and Equity $12,656

Working note:-

Cash = (opening + Sales - Purchases payment - Operating expenses -Income tax expenses)

= $2,000 + $81,600 - $44,800 - $26,000 - $3,024

= $9,776

Retained earning = (Opening + Net Income)

= $3,100 + $7,056

= $10,156

Statement of Cash Flows

Cash Flow from Operating Activities

Cash Sales $81,600

Payment to Accounts Payable ($44,800)

Operating Expenses ($26,000)

Income tax paid ($3,024)

Net Increase in cash and

cash equivalents $7,776

Add: Opening Cash and

cash equivalents $2,000

Closing Cash and cash equivalents $9,776

Weighted Average cost flow Assumption

Income Statement

Sales (2,040 × $40) $81,600

Less: Cost of goods sold ($44,880)

Gross Profit $36,720

Less: Operating Expenses ($26,000)

Income before income taxes $10,720

Less: Income tax (30% × $10,720) ($3,216)

Net Income $7,504

Balance Sheet

Assets

Cash $9,584

Inventory $3,520

Total Assets $13,104

Liabilities and Stockholder's Equity

Common Stock $2,500

Retained Earnings $10,604

Total Liabilities and Equity $13,104

Working note

Cash = opening + Sales - Purchases payment - Operating expenses - Income tax expenses )

= $2,000 + $81,600 - $44,800 - $26,000 - $3,126

= $9,584

Retained earning = (Opening + Net Income)

= $3,100 + $7,504

= $10,604

Statement of Cash Flows

Cash Flow from Operating Activities

Cash Sales $81,600

Payment to Accounts Payable ($44,800)

Operating Expenses ($26,000)

Income tax paid ($3,216)

Net Increase in cash and

cash equivalents $7,584

Add: Opening Cash and

cash equivalents $2,000

Closing Cash and

cash equivalents $9,584

8 0

3 years ago

Which two of these are essential for completing an initial mortgage loan application?

klio [65]

The two things that should be important for finishing the initial mortgage loan application are the purchase price of the home, present debts & credit history.

The following information should be considered:

The above two things should be important as it helps in determining the loan amount & credit history for determining the credit score.
Also, the insurance money & money in the saving account should not be important also the income proof is required at a later stage for the loan security.

Therefore we can conclude that the two things that should be important for finishing the initial mortgage loan application are the purchase price of the home, present debts & credit history.

Learn more about the loan here: brainly.com/question/11794123

3 0

3 years ago