Question

Sellall Department Stores reported the following amounts in its adjusted trial balance prepared as of its December 31 year-end: Administrative Expenses, $2,400; Cost of Goods Sold, $22,728; Income Tax Expense, $3,000; Interest Expense, $1,600; Interest Revenue, $200; General Expenses, $2,600; Net Sales Revenue, $37,880; and Delivery (freight-out) Expense, $300.
Required:
Prepare a multistep income statement for distribution to external financial statement users.

Answer 1

Answer:

$5,452

Explanation:

Preparation of a multistep income statement for distribution to external financial statement users

SELLALL DEPARTMENT STORES

Income Statement

For the Year Ended December 31

Net Sales$37,880

Less Cost of Goods Sold $22,728

Gross Profit 15,152

($37,880-$22,728)

Operating Expenses

Administrative Expenses $2,400

General Expenses $2,600

Delivery Expense $300

Total Operating Expenses $5,300

($2,400+$2,600+$300)

Income from Operations $9,852

($15,152-$5,300)

Interest Expense($1,600)

Interest Revenue $200

Income before Income Tax Expense $8,452

($9,852-$1,600+$200)

Income Tax Expense $3,000

Net Income $5,452

($8,452-$3,000)