Question

The following income statement contains errors.Curbstone CompanyIncome StatementFor the Year Ended August 31, 20161 Sales $8,595,000.00 2 Cost of merchandise sold 6,110,000.003 Income from operations $2,485,000.004 Operating expenses: 5 Selling expenses $800,000.00 6 Administrative expenses 575,000.00 7 Delivery expense 425,000.00 8 Total operating expenses 1,800,000.009 $685,000.0010 Other income and expense: 11 Interest revenue 45,000.0012 Gross profit $640,000.00Identify the errors by preparing a corrected multiple-step income statement. Be sure to complete the heading of the statement. Refer to the information given in the exercise and to the list of Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries. A colon (:) will automatically appear if it is required. In the Other income and expenses section only, enter amounts that represent other expenses as negative numbers using a minus sign.

Answer 1

Step-by-step explanation:

The preparation of the corrected multiple -step income statement is shown below:

Curbstone Company

Income Statement

For the Year Ended August 31, 2016

Sales revenue $8,595,000

Less: Cost of merchandise sold -$6,110,000

Gross profit $2,485,000

Less: Operating expenses

Selling expenses $800,000

Administrative expenses $575,000

Delivery expense $425,000

Total operating expenses -$1,800,000

Income from operations $685,000

Other income and expenses

Interest revenue $45,000

Net income $730,000