Question

Current Attempt in Progress The following selected accounts from the Sheridan Company’s general ledger are presented below for the year ended December 31, 2022: Advertising expense $ 47,000 Interest revenue $ 25,000 Common stock 242,000 Inventory 59,000 Cost of goods sold 1,077,000 Rent revenue 24,000 Depreciation expense 117,000 Retained earnings 527,000 Dividends 142,000 Salaries and wages expense 667,000 Freight-out 17,000 Sales discounts 8,100 Income tax expense 62,000 Sales returns and allowances 36,000 Insurance expense 15,000 Sales revenue 2,392,000 Interest expense 62,000 Prepare a multiple-step income statement. Sheridan Company Income Statement

Answer 1

Answer:

2022 Income Statement

$ 2,392,000 Sales

-$ 8,100   Sales Discounts

-$ 36,000 Sales returns and allowances

$ 2,347,900 Net Sales Revenues

-$ 117,000 Depreciation expense

-$ 1,077,000 Cost of goods sold

-$ 1,194,000 Cost of goods sold

$ 1,153,900 Gross PROFIT

-$ 47,000 Advertising expense

-$ 667,000 Salaries and Wages Expenses

-$ 17,000 Freight out expenses

-$ 731,000 Operating Expenses

$ 422,900 INCOME FROM OPERATIONS

$ 24,000 Rent Revenue

$ 25,000 Interest Revenue

$ 49,000 Other Revenues and Gains:

-$ 62,000 Interest Expenses

-$ 15,000 Insurance Expenses

-$ 77,000 Other expenses and Loss

$ 394,900 NET INCOME AFTER TAXES

-$ 62,000 Income Tax Expenses

$ 332,900 Net INCOME

Explanation:

In the multistep income it's possible to segregate the operative expenses and  revenues of the non operative, it also shows the gross profit, which is  

the Net Sales Revenues less the Cost of Goods Sold.  

First it's shown the Gross Profit, then substracted the operating expenses  

to arrive at operating income.

Finally with the non operating movements we have the net Income After Taxes  and with the taxes expenses we have the Net Income of the company.