Question

The following information is available for Flounder Corp. for the year ended December 31, 2017: Other revenues and gains Other expenses and losses Cost of goods sold Other comprehensive income $10,000 Sales revenue 14,900 Operating expenses 246,400 Sales returns and allowances 5,500 $641,300 231,800 40,000

Prepare a multiple-step income statement for Flounder Corp and comprehensive income statement. The company has a tax rate of 30%. This rate also applies to the other comprehensive income. Flounder Corp. Income Statement For the Year Ended December 31, 2017 Revenues Sales Revenue 641300 Less . Sales Returns and Allowances 40000 Net Sales $ 601300 Cost of Goods Sold 246400 Gross Profit 354900 Operating Expenses 231800 Income From Operations 123100 Other Revenues and Gains $ 10000 Other Expenses and Losses 14900

Answer 1

Flounder Corp. Income Statement For the Year Ended December 31, 2017

Revenues:

Sales Revenue $ 641,300

Less Sales Returns and Allowances 40,000

Net Sales $ 601,300

Cost of Goods Sold 246,400

Gross Profit 354,900

Operating Expenses 231,800

Income From Operations $123,100

Income Tax on operations 36,930

Net Income after Income Tax $86,170

Comprehensive Income Statement:

Revenues:

Sales Revenue $ 641,300

Less Sales Returns and Allowances 40,000

Net Sales $ 601,300

Cost of Goods Sold 246,400

Gross Profit 354,900

Operating Expenses 231,800

Income From Operations $123,100

Other Revenues and Gains $ 10,000

Less other Expenses and Losses 14,900

Income from Operations &

other comprehensive income $118,200

Income Tax $35,460

Net Income after Tax $82,740

Step-by-step explanation:

a) A multi-step income statement arranges the revenue and expenses sequentially in order to bring out some financial performance measurement elements, like the gross profit, income from operations, etc.

b) A Comprehensive income statement is a financial statement that includes both standard income and expenses and other comprehensive income and expenses.