Question

Beasley, Inc., reports the following amounts in its December 31, 2021, income statement. Sales revenue $ 350,000 Income tax expense $ 39,000 Interest expense 12,000 Cost of goods sold 125,000 Salaries expense 37,000 Advertising expense 23,000 Utilities expense 43,000 Prepare a multiple-step income statement.

Answer 1

Answer and Explanation:

The preparation of the multiple-step income statement is presented below:

Beasley, Inc.

Multiple-step income statement

December 31, 2021

Sales revenue $350,000

Less: Cost of goods sold -$125,000

Gross profit $225,000

Less: Operating expenses

Salaries expense -$37,000

Advertising expense -$23,000

Utilities expense -$43,000

Operating income $122,000

Less: interest expense -$12,000

Income before income tax $110,000

Less: income tax expense -$39,000

Net income $71,000

We simply deduct all the expenses from the sales revenue so that the net income could arrive