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zubka84 [21]
3 years ago
5

Two accountants for the firm of Elwes and Wright are arguing about the merits of presenting an income statement in a multiple-st

ep versus a single-step format. The discussion involves the following 2014 info related to P. Bride Company. ($000 omitted).Administrative expense $Officers' salaries 4,900Depreciation of office furniture and equipment 3,960Cost of goods sold 60,570Rent revenue 17,230Selling expense Delivery expense 2,690Sales commissions 7,980Depreciation of sales equipment 6,480Sales revenue 96,500Income tax 9,070Interest expense 1,860Required:(a) Prepare income statement for the year 2014 using the mutiple-step form. Common shares outstanding for 2014 total 40,550 (000 omitted).(b) Prepare an income statement for the year 2014 using the single-step form.
Business
1 answer:
galina1969 [7]3 years ago
8 0

Answer:

Explanation:

A) Multiple Step Income Statement

Sales                                                                               96500

Cost Of Goods Sold                                                     -60570

Gross Profit                                                                   35930  

Operating Expenses

Admin : Staff Salaries                                                  -4900

              Deprecation                                                   -3960

Selling: Delivery Charges                                           -2690

             Commission Charges                                    -7980

             Depreciation                                                   -6480

Operating Profit                                                            9920

Non-operating Income                                               17230

Interest Expense                                                          -1860

Total Non Operating Income                                      15370

Total Income                         (9920+15370)              25290

Income Tax                                                                  -9070

Net Income After Tax                                                 16220                          

B)Single Step Income Statement For the year ended 2014

Revenue                                                                   96500

Cost Of Goods Sold                                               -60570

Gross profit                                                             35930

Admin Expenses (4900+3960)                              -8860

Selling Expenses                                                    -17150

Operating Profit                                                       9920    

Finance Cost                                                           -1860

Other Income                                                           17230

Profit before Tax                                                      25290  

Income Tax                                                               -9070

Profit After Tax                                                          16220

     

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