Question

Wayman Corporation reports the following amounts in its December 31, 2018, income statement. Sales revenue $ 432,000 Income tax expense $ 56,000 Interest expense 26,000 Cost of goods sold 136,000 Salaries expense 46,000 Advertising expense 36,000 Utilities expense 56,000 Required: Prepare a multiple-step income statement.

Answer 1

Wayman Corporation

Income statement for the year ended December 31, 2018

Amount in $ Amount in $

Sales revenue 432,000

Cost of goods sold (136,000)

Gross profit 296,000

Operating expenses

Salaries expense 46,000

Advertising expense 36,000

Utilities expense 56,000 (138,000)

Operating income 158,000

Non-operating or other

Interest expense (26,000)

Income before income taxes 132,000

Income tax expense (56,000)

Net income 76,000

Step-by-step explanation:

The multiple income statement is one in which incomes and expenses are grouped under operating and non-operating heads. Like other forms of income statement, it shows the income and expenses of an entity for a given period of time.

Answer 2

$76,000

Step-by-step explanation:

WAYMAN CORPORATION

Multiple-step Income Statement

For the year ended December 31, 2018

Sales revenue $ 432,000

Cost of goods sold 136,000

Gross profit $296,000

Salaries expense $46,000

Utilities expense $56,000

Advertising expense $36,000

Operating income $158,000

Interest expense $26,000

Income before income taxes

($158,000-$26,000) $132,000

Income tax expense $56,000

Net income ($132,000-$56,000) $76,000

Operating income= Gross profit- Total expenses

$296,000-$138,000=$158,000