Question

prepare an income statement for the year 2020 using the multiple-step form and single-step form

Con 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 Waterway Company ($000 omitted). Administrative expense Officers' salaries $4,972 Depreciation of office furniture and equipment 4,032 60,642 Cost of goods sold Rent revenue 17,302 Selling expense Delivery expense 2,762 Sales commissions 8,052 Depreciation of sales equipment 6,552 Sales revenue 96,572 Income tax 9.142 Interest expense 1,932 Common shares outstanding for 2020 total 31,576 (000 omitted)

Answer 1

Answer:

WATERWAY COMPANY
Income Statement
For the year ended 2020
(In thousands, except earnings per share)
Sales revenue			$96,572
Cost of goods sold			($60,642)
Gross profit			$35,930
Operating expenses:
Selling expense:
Delivery expense	$2,762
Sales commissions	$8,052
Depreciation of sales equipment	$6,552
Total selling expenses		$17,366
Administrative expenses:
Officers' salaries	$4,972
Depreciation of the office furniture and equipment	$4,032
Total administrative expense		$9,004
Total operating expenses			$26,370
Operating income			$9,560
Non-operating/other incomes(expenses):
Rent revenue	$17,302
Interest expense	($1,932)
Total non-operating income(expense)			$15,370
Net income before income tax			$24,930
Income tax			($9,142)
Net income			$15,788
Earning per share ($15,788/31,576)			$0.50