Question

A company reports the following amount in its December 31, Year 1, income statement.

Answer 1

Answer:

Multiple-step income statement for the year ending December 31, year 1

Sales                                                    $275,200

Cost of Goods Sold                           ($185,000)

Gross Profit                                                               $90,200

Operating Expenses:

Administrative Expense                                          ($35,000)

Selling expenses                                                     ($55,000)

General Expense                                                     ($45,000)

Operating Income                                                    ($44,800)

Non-Operating Revenue                                         $105,000

Operating Income before tax                                  $60,200

Income taxes                                                            ($25,000)

Operating Income after Tax                                     $35,200

Explanation:

Multi-step Income statement segregate the Operating Income and Expenses from non operating Income and Expense. It shows the gross profit and net operating income separately.