Question

Roprin, Inc.’ capital structure consists of 100,000 shares of common stock. At December 31, 2019, an analysis of the accounts and discussions with company officials revealed the following information:

Sales		1,1 50,000
Purchase Discounts		18,000
Purchase	646,000
Selling Expenses	128,000
Cash	60,000
Sales Discounts	24,000
Freights-in	10,000
Purchase Returns and Allowances		4,000
Accounts Receivable	90,000
Common Stock		447,000
Accumulated Depreciation Equipment		180,000
Dividend Revenue		8,000
Sale Returns and Allowances	32,000
Income Tax Expense (30%) (33,000)	33,000
Inventory, 31 December 2019	125,000
Unearned Service Revenue		4,000
Accrued Interest Payable		1,000
Interest Revenue		6,000
Land	370,000
Patents	100,000
Accumulated Depreciation Building (27,000)
Retained Earnings, January 1, 2019		290,000
Interest Expense	17,000
Inundations Loss	32,000
General and Administrative Expenses	160,000
Dividends Declared	29,000
Allowance for Doubtful Accounts		5,000
Note Payable (Maturity 1 July 2030)		200,000
Machinery and Equipment	450,000
Materials and Supplies	40,000
Accounts Payable		60,000
Building (254,000)
Cost of Goods Sold	152,000	125,000
	2,498,000	2,498,000

The Company apply a 30% of income tax to ordinary income.

Instructions

(a)       Prepare a multiple-step income statement

Answer 1

(a) Multiple-step income statement as follows:

Roprin Inc. Income Statement For the Year Ended December 31 2019 Sales $1,150,000 Less: Sales Discount ($24,000) Less: Sales return and allowances ($32,000) $1,094,000 ($152,000) $942,000 Less: Cost of goods sold Gross profit Operating expenses General and Administration expenses Selling expense Depreciation expense-Equipment Depreciation expense-Building $160,000 $128.000 $180,000 $27,000 $495,000 S447,000 Income from operation Other Income and Expense: Dividend revenue Interest revenue Interest expense Inundations loss $8,000 $6.000 ($17,000) ($32,000) ($35,000) Net Income $412,000