Question

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 Metlock Company ($000 omitted). Administrative expense Officers' salaries $5,401 Depreciation of office furniture and equipment 4,461 Cost of goods sold 61,071 Rent revenue 17,731 Selling expense Delivery expense 3,191 Sales commissions 8,481 Depreciation of sales equipment 6,981 Sales revenue 97,001 Income tax 9,571 Interest expense 2,361 Common shares outstanding for 2020 total 26,428 (000 omitted).

Prepare an income statement for the year 2020 using the single-step form. (Round earnings per share to 2 decimal places, e.g. 1.48.)

(In thousands, except earnings per share) Revenues Sales Revenue $ 97001 Rent Revenue 17731 Total Revenues 114732 Expenses Cost of Goods Sold 61071 Salaries and Wages Expense 5401 Depreciation Expense 4461 Selling Expenses 3191 < Interest Expense 2361 Income Before Income Tax $ 22785 Net Income /(Loss) $ 13214

Answer 1

Answer
Particulars	Amount	Amount
Sales revenue		$           97,001
Cost of goods sold		$           61,071
Gross margin		$           35,930
Operating expense
Selling expense
Delivery expense	$             3,191
Sales commissions	$             8,481
Depreciation of sales equipment	$             6,981	$           18,653
Administrative expense
Officers’ salaries	$             5,401
Depreciation of office furniture and equipment	$             4,461	$             9,862
Total operating expense		$           28,515
operating income		$             7,415
other income/expense
Rent revenue	$           17,731
Interest expense	$            -2,361	$           15,370
Income before tax		$           22,785
Less : Income tax		$            -9,571
Net income		$           13,214