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 office supplies expense Insurance expense Sales office salaries expense Rent expense-Selling space Sales staff wages $ 6,240 Depreciation expense-office copier 750 sales discounts 1,270 Sales returns and allowances 227.000 TV advertising expense 33.000 Interest revenue 11.400 cost of goods sold 23.800 Sales commission expense 560 15,700 4.000 3.800 91.000 13, 200 Prepare a multiple-step income statement.

Answer 1

Income statement for the year ended December 31:

Description	Amount	Amount
Sales	$227000
Less: Sales discount	($15700)
Less: Sales returns and allowances	($4000)
Net sales		$207300
Cost of goods sold		($91000)
Gross Margin		$116300
Less: Expenses
General & administrative expenses:
Office supplies expense	$750
Insurance expense	$1270
Office salaries	$33000
Depreciation expense - Office copier	$560
Total General & administrative expense		($35580)
Selling expense:
Rent expense - Selling space	$11400
Sales staff wages	$23800
TV advertising expense	$3800
Sales commission expense	$13200
Total selling expense		($52200)
Total expenses		($87780)
Other revenues, gains, expenses & losses
Gain on sale of equipment	$6240
Interest revenue	$660
Total other revenues, gains, expenses & losses		$6900
Net income		$35420