Question

Exercise 4-15 Preparing a multi-step income statement LO P4 Fit-for-Life Foods reports the following income statement accounts for the year ended December 31. Gain on sale of equipment $ 6,190 Depreciation expense—Office copier $ 560 Office supplies expense 700 Sales discounts 16,900 Insurance expense 1,360 Sales returns and allowances 4,100 Sales 227,000 TV advertising expense 3,500 Office salaries expense 31,100 Interest revenue 650 Rent expense—Selling space 12,000 Cost of goods sold 88,700 Sales staff wages 23,800 Sales commission expense 13,600 Prepare a multiple-step income statement.

Answer 1

1..
Solution: Statement showing a multiple-step income statement
FIT-FOR-LIFE FOODS,
Income statement
for the year ended December 31
Sales		227000
Less: Sales discount	16900
Less : Sales return and allowances	4100	21000
Net sales		206000
Cost of good sold		88700
Gross profit		117300
Operating Expenses:
Selling expenses:
Rent expenses-selling space	12000
Sales staff wages	23800
TV advertising expenses	3500
Sales commission expenses	13600
Total selling expenses		52900
General and advertising exenses :
Office supplies expenses	700
Insurance expenses	1360
Office salaries expenses	31100
Depreciation expenses-office copier	560
Total general and administrative expenses		33720
Total operating expenses		86620
Income from Operations		30680
Other revenues, gains, expenses and losses
Gain on sales of equipment	6190
interest revenue	650
Total other revenue, gains, expenses & losses		6840
Net Income		37520