Question

Two accountants for the firm of Elwes and Wright are arguing about the merits of presenting an income statement in a multiple-step versus a single-step format. The discussion involves the following 2020 information related to Tamarisk Company ($000 omitted).

Administrative expense
Officers' salaries		$5,168
Depreciation of office furniture and equipment		4,228
Cost of goods sold		60,838
Rent revenue		17,498
Selling expense
Delivery expense		2,958
Sales commissions		8,248
Depreciation of sales equipment		6,748
Sales revenue		96,768
Income tax		9,338
Interest expense		2,128

Common shares outstanding for 2020 total 29,224 (000 omitted).

Prepare an income statement for the year 2020 using the multiple-step form.

Answer 1

Preparation of Multi Step Income Statement: A 96,768.00 (60,838.00) $ 35,930.00 5,168.00 A 4,228.00 $ 19,396.00) A Sales Revenue Less: Cost of Goods Sold Gross Profit Less: Administrative Expenses: Officers' Salaries Depreciation of Office furniture and Equipment Less: Selling Expenses: Delivery Expense Sales Commission Depreciation of Sales Equipment $ Operating Income Non Operating Incomes and Expenses: Rent Revenue Less: Interest Expense Income Before Taxes Less: Income Tax Expense Net Income A 2,958.00 8,248.00 6,748.00 $ $ (17,954.00) 8,580.00 17,498.00 (2,128.00) $ $ $ 15,370.00 (9,338.00) 6,032.00