Question

A company reports the following amount in its December 31, Year 1, income statement.

Sales revenue $ 275,000
Income tax expense $ 25,000
Non-operating revenue 105,000
Cost of goods sold 185,000
Selling expenses 55,000
Administrative expenses 35,000
General expenses 45,000

Prepare a multiple-step income statement.

Answer 1

Multiple-step income statement for the year ending December 31, year 1

Sales $275,200

Cost of Goods Sold ($185,000)

Gross Profit $90,200

Operating Expenses:

Administrative Expense ($35,000)

Selling expenses ($55,000)

General Expense ($45,000)

Operating Income ($44,800)

Non-Operating Revenue $105,000

Operating Income before tax $60,200

Income taxes ($25,000)

Operating Income after Tax $35,200

Step-by-step explanation:

Multi-step Income statement segregate the Operating Income and Expenses from non operating Income and Expense. It shows the gross profit and net operating income separately.