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 Whispering Company ($000 omitted). $5,330 4,390 61,000 17,660 Administrative expense Officers' salaries Depreciation of office furniture and equipment Cost of goods sold Rent revenue Selling expense Delivery expense Sales commissions Depreciation of sales equipment Sales revenue Income tax Interest expense 3.120 8,410 6,910 96,930 9.500 2,290 Common shares outstanding for 2017 total 40,550 (000 omitted)

Answer 1

ANSWER

Whispering Company
Income Statement
For the year ended 2017
Net Sales		$96,930
Less: Cost of Goods Sold		$61,000
Gross profit		$35,930
Less: Operating Expense
Selling Expenses
Delivery Expense	$3,120
Sales Commission	$8,410
Depreciation	$6,910
Total Selling Expenses	$18,440
Administrative Expense
Officers Salaries	$5,330
Depreciation	$4,390
Other administrative expenses	-
Total Administrative Expenses	$9,720
Total Operating Expense		$28,160
Operating Income		$7,770
Add (Less) Non Operating Items
Rental Revenue	$17,660
Interest Expense	$2,290	$15,370
Income Before Taxes		$23,140
Income Tax Expense		$9,500
Net Income		$13,640
Shares Outstanding		40,550
Earning per share		$0.34

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