Answer:
Hi, the question you provided is missing the sales amounts.
However, the important principles for this questions are explained below :
A multiple-step income statement shows separately income derived from Primary Activity of the entity (Operating Income / Loss) and income that includes Secondary Activities of the Company (Net Income / Loss).
Operating Expenses used in determination of Operating Income can be further categorized into <em>Selling</em>, <em>General</em> and <em>Administrative</em> Expenses.
Here is what the multiple-step income statement would look like using the data and information available.
<u>Multiple-step income statement for month ended August 31, 2012</u>
Sales Revenue<em> (information missing) </em> $ ? ? ?
<em>Less Cost of Sales :</em>
Opening Merchandise $0
Add purchases $ 119,070
Add transport expenses $3,900
Less Purchase returns and allowances ($5,715) $117,255
Net Purchases $117,255
Less Closing Merchandise ($32,684) ($84,571)
Gross Profit $ ? ? ?
Operating Income
Discount Received $2,500
Net Income / Loss $ ? ? ?
