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 Marigold Company ($000 omitted). $5,150 Administrative expense Officers' salaries Depreciation of office furniture and equipment Cost of goods sold 4,210 60,820 Rent revenue 17,480 Selling expense Delivery expense Sales commissions Depreciation of sales equipment Sales revenue 2,940 8,230 6,730 96,750 9,320 2,110 Income tax Interest expense Common shares outstanding for 2020 total 36,800 (000 omitted). (a) Your answer is partially correct.

Answer 1

$96,750 $60,820 $35,930 $17,900 MARIGOLD COMPANY Income Statement For The Year Ended December 31, 2020 (In thousands, except earning per share) Sales revenue Less: Cost of goods sold Gross profit Less: Operating Expenses Selling expenses Delivery expense $2,940 Sales commission $8,230 Depreciation on sales equipment $6,730 Total selling expenses General and Administrative expenses Officer's Salary $5,150 Depreciation on office furniture and equipment $4,2101 Total General and administrative expenses Total Operating expenses Income from Operations Other Revenues and Gains Rent revenue Other expenses and losses Interest expense Income before tax Income tax expense Net Income /(Loss) $9,360 $27,260 $8,670 $17,480 $26,150 $2,110 $24,040 $9,320 $14,720 Earnings per share $0.40 $14,720/36,800