Question

Presented below is information for Blossom Company for the month of January 2022. Cost of goods sold $270,000 Rent expense $35,000 Freight-out 6,800 Sales discounts 7,800 Insurance expense 13,000 Sales returns and allowances 12,000 Salaries and wages expense 45,000 Sales revenue 431,000. Prepare an incomestatemnt using the multi-step format.

Answer 1

Answer and Explanation:

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

Blossom Company

Income Statement

For the Month January 2022

Revenues

Sales revenue $431,000

Less:

Sales discount -$7,800

Sales return -$12,000

-$19,800

Net Sales $411,200

Less: Cost of goods sold -$270,000

Gross Profit $141,200

Less: Operating expenses:

Freight out -$6,800

Insurance expense -$13,000

Salaries and wages expense -$45,000

Rent expense -$35,000

Total Operating expenses -$99,800

Operating Income $41,400

We simply deduct the expenses from the gross profit so that the operating income could arrive