Question

Single-Step Income Statement

Brandt Corporation had sales revenue of $400,000 for the current year. For the year, its cost of goods sold was $250,000, its operating expenses were $30,000, its interest revenue was $2,000, and its interest expense was $12,000. Brandt's income tax rate is 30%.

Prepare a single-step income statement for Brandt Corporation for the current year.

BRANDT CORPORATION
Income Statement
For Year Ended December 31, Current Year
Revenues
		$
		$
Expenses
	$
		$

Answer 1

BRANDT CORPORATION
Income Statement
For Year Ended December 31, Current Year
Revenues:
Sales revenue	$400,000
Interest Revenue	$2,000
Total Revenues           [$400,000 + $2,000]		$402,000
Expenses:
Cost of goods sold	$250,000
Operating expenses	$30,000
Interest expense	$12,000
Income tax expense        [Refer working note]	$33,000
Total expenses                  [$250,000 + $30,000 + $12,000 + $33,000]		$325,000
Net Income                     [$402,000 - $325,000]		$77,000

.

.

Working note - Calculation of income tax expense
Revenues:
Sales revenue	$400,000
Interest Revenue	$2,000
Total Revenues           [$400,000 + $2,000]		$402,000
Expenses:
Cost of goods sold	$250,000
Operating expenses	$30,000
Interest expense	$12,000
Total expenses                       [Not including income tax expense]		$292,000
Income before income tax		$110,000
Income tax expense       [Income before income tax x 30% = $110,000 x 30%]		$33,000