Question

Two accountants for the form 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 2017 information related to Bridgeport Company (5000 omitted). Administrative expense Officers' salaries $5,592 Depreciation of office furniture and equipment 4,652 Cost of goods sold 61,262 Rent revenue 17,922 Selling expense Delivery expense 3,382 Sales commissions 8,672 Depreciation of sales equipment 7,172 Sales revenue 97.192 Income tax 9,762 Interest expense 2,552 Common shares outstanding for 2017 total 40,550 (000 omitted).

Answer 1

Bridgeport Company
Income Statement (Multi-step)
For the year ended December 31,2017 ($000 omitted)
Sales revenue			$97,192
Cost of goods sold			($61,262)
Gross profit			$35,930
Operating expenses:
Selling expense:
Delivery expense	$3,382
Sales commissions	$8,672
Depreciation of sales equipment	$7,172
Total selling expenses		$19,226
Administrative expense:
Officer's salaries	$5,592
Depreciation of office furniture and equipment	$4,652
Total administrative expenses		$10,244
Total operating expenses			$29,470
Operating income			$6,460
Non-operating income (expense):
Rent revenue			$17,922
Interest expense			($2,552)
Income before income tax			$21,830
Income tax			($9,762)
Net income			$12,068
Earning per share ($12,068/40,550)			$0.30