Question

B) The following selected accounts from Okanagan Corporation’s general ledger are presented below for the year ended December 31, 2018:

Accounts receivable $249,000 Accumulated depreciation—equipment 745,000 Advertising expense 50,000 Common shares 254,000 Cost of goods sold 1,085,000 Depreciation expense 131,000 Dividends declared 154,000 Equipment 1,461,000 Freight out 24,000 Income tax expense 73,000 Insurance expense 23,000 Interest expense 60,000 Interest revenue 31,000 Inventory 103,000 Prepaid expenses 31,000 Rent revenue 24,000 Retained earnings 506,000 Salaries expense 772,000 Sales 2,646,000 Sales discounts 22,000 Sales returns and allowances 43,000 Unearned revenue 16,000

Prepare a single-step income statement. Okanagan Corporation Income Statement (Single-step)

• 

• Prepare a multiple-step income statement.

• Okanagan Corporation
  Income Statement (Multiple-step)

Answer 1

Multistep Income Statement- Okanagan Corporation
Particulars		$
Sales	$2,646,000
Sales Discount	($22,000)
Sales Return and Allowance	($43,000)
Net Sales		$2,581,000.00
Less: Cost of Goods Sold		-$1,085,000.00
Gross Profit		$1,496,000.00
Operating Expenses:
Salaries Expense	$772,000.00
Depreciaiton Expense	$131,000.00
Advertising Expense	$50,000.00
Freight Out	$24,000.00
Insurance expense	$23,000.00	$1,000,000.00
Operating Income		$496,000.00
Other Income / (Loss)
Rent Revenue	$24,000.00
Interest Income	$31,000.00
Interest Expense	-$60,000.00	-$5,000.00
Income from continuing operations before Tax		$491,000.00
Less: Tax		-$73,000.00
Net Income		$418,000.00