Question

The adjusted trial balance of Kasten company contained the following information:

                                                                           Debit.                                       Credit

Sales		$660,000
Sales returns and allowances	$20,000
Sales discount	7,000
Cost of goods sold	436,000
Freight-out	2,000
Interest expense	102,000
Store salaries	55,000
Utilities expense	28,000
Depreciation expense	22,000
Interest revenue		5,000

Required:

Use the above information to prepare a multiple-step income statement for the year-ended December 31.

Answer 1

Multiple step income statement

For the year ended December 31

Sales		660000
Less: Sales returns and allowances	-20000
Less: Sales discount	-7000	-27000
Net Sales		633000
Cost of goods sold		436000
Gross profit		197000
Operating expense
Freight out	2000
Store salaries	55000
Utilities expense	28000
Depreciation expense	22000
Total operating expense		107000
Operating income		90000
Other revenue
Interest revenue	5000
Other expense
Interest expense	-102000
		-97000
Net (loss)		-7000