Question

Based on the following information, calculate the amounts that would appear on a ultiple-step income statement for the Lindsey Company. Show and label your lculations.

Office Salaries Expense $15000
Interest Expense $19000
Sales $500000
Advertising Expense $59000
Sales Salaries Expense $26000
Cost of Goods Sold $328000
Sales Returns and Allowances $15000
Calculate Net Sales?
Calculate Gross Profit?
Calculate Operating Income?

Answer 1

To calculate the amounts that would appear on a multiple-step income statement for the Lindsey Company, you need to calculate Net Sales, Gross Profit, and Operating Income.

Step-by-step explanation:

To calculate the amounts that would appear on a multiple-step income statement for the Lindsey Company, we need to follow these steps:

1. Calculate Net Sales: Net Sales is calculated by subtracting Sales Returns and Allowances from Sales. In this case, Net Sales = Sales - Sales Returns and Allowances = $500,000 - $15,000 = $485,000
2. Calculate Gross Profit: Gross Profit is calculated by subtracting Cost of Goods Sold from Net Sales. In this case, Gross Profit = Net Sales - Cost of Goods Sold = $485,000 - $328,000 = $157,000
3. Calculate Operating Income: Operating Income is calculated by subtracting Total Operating Expenses from Gross Profit. In this case, Operating Income = Gross Profit - (Office Salaries Expense + Advertising Expense + Sales Salaries Expense + Interest Expense) = $157,000 - ($15,000 + $59,000 + $26,000 + $19,000) = $38,000