Question

The following information is available for Splish Brothers Corp. for the year ended December 31, 2022.Other revenues and gains 23,600other expenses and losses 4,000costs of good sold 291,000sales discount 4,800sales revenue 759,000operating expenses 220,000sales returns and allowances 10,600Prepare a multiple-step income statement for Splish Brothers Corp. The company has a tax rate of 25%.

Answer 1

Answer:

Splish Brothers Corp.

Multiple-step income statement for the year ended December 31, 2022.

Sales Revenue                                                                  759,000

Less sales returns and allowances                                   (10,600)

Net Sales                                                                            748,400

Less Costs of Good Sold                                                 (291,000)

Gross Profit                                                                        457,400

Less Operating Expenses

Operating expenses                          220,000

Sales discount                                        4,800               (224,800)

Operating Profit                                                                232,600

Less Non - Operating Expenses

Other revenues and gains                (23,600)

Other expenses and losses                 4,000                    19,600

Net Profit before tax                                                        252,200

Income tax expense                                                         (63,050)

Net Profit after tax                                                              189,150

Explanation:

Multiple-step income statement shows separately the income generated from Primary activities and that generated from Secondary activities as above.