Question

Sellall Department Stores reported the following amounts in its adjusted trial balance prepared as of its December 31 year-end: Administrative Expenses, $2,600; Cost of Goods Sold, $23,760; Income Tax Expense, $3,170; Interest Expense, $1,600; Interest Revenue, $200; General Expenses, $2,800; Sales Revenue, $44,000; Sales Discounts, $2,200; Sales Returns and Allowances, $1,980; and Delivery (freight-out) Expense, $320. Prepare a multistep income statement for distribution to external financial statement users.

Answer 1

Sellall Department Stores

Multi-step income statement

for the year end December 31, xxxx

Sales Revenue, $44,000

Add: Interest Revenue, $200

Less: Sales Discounts, $2,200

Less: Sales Returns and Allowances, $1,980

Net Revenue $40,020

Less: Cost of Goods Sold, $23,760

Gross Income $16,260

Less: Operating Expenses

Administrative Expenses, $2,600

General Expenses, $2,800

Delivery (freight-out) Expense, $320

$5,720

Operating Income $10,540

Less: Interest Expense, $1,600

Income before tax $8,940

Less: Income Tax Expense, $3,170

Net Income $5,770

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.