Question

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 $ 6,240 240 Depreciation expense-Office Uffice 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 3,800 660 91,000 13, 200 Prepare a multiple-step income statement. Answer is not complete. FIT-FOR-LIFE FOODS Income Statement For Year Ended December 31 Sales Less: Sales discounts Less: Sales returns and allowances Net sales Cost of goods sold Gross profit Expenses Selling expenses Total selling expenses General and administrative expenses Total general and administrative expenses Total expenses Income from operations Other revenues, gains, expenses & losses Gain on sale of equipment Interest revenue Sales Total other revenues, gains, expenses & losses Net income

Answer 1

Multiple step income statement

Sales	227,000
Sales discounts	- 15,700
Sales returns and allowance	- 4,000
Net sales		207,300
Cost of goods sold		- 91,000
Gross profit		116,300
Expenses
Selling expenses
Rent expense - Selling space	11,400
Sales staff wages	23,800
TV advertising expense	3,800
Sales commission expense	13,200
Total selling expenses		- 52,200
General and administration expenses
Office supplies expense	750
Insurance expense	1,270
Office salaries expense	33,000
Depreciation expense - Office copier	560
Total General and administration expenses		- 35,580
Total expenses		- 87,780
Income from operations		28,520
Other revenues
Gain on sale of equipment		6,240
Interest revenue		660
Net income		$35,420

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