Question

Exercise 4-14A (Algo) Single-step and multistep income statements LO 4-6 The following information was taken from the accounts of Green Market, a small grocery store, at December 31, Year 1. The accounts are listed in alphabetical order, and all have normal balances. Dollar amounts are given in thousands. Accounts payable Accounts receivable Advertising expense Cash Common stock Cost of goods sold Interest expense Merchandise inventory Prepaid rent Retained earnings, 1/1/Year 1 Sales revenue Salaries expense Rent expense Gain on sale of land $ 613 413 200 423 213 700 57 320 53 648 1,130 260 100 78

Answer 1

Income statement provides the net income earned during the period calculated as total revenue earned less total expenses incurred
Single step income statement
Green market
Sales revenue		$1,130
Expenses:
Advertising expense	$200
Cost of goods sold	$700
Interest expense	$57
Salaries expense	$260
Rent expense	$100
Total costs and expense		$1,317
Gain on sale of land		$78
Net loss		-$109
Multistep income statement
Green market
Sales revenue		$1,130
Cost of goods sold		$700
Gross margin		$430
Operating expenses:
Advertising expense	$200
Salaries expense	$260
Rent expense	$100
Total operating expenses		$560
Operating loss		-$130
Non-operating items
Interest expense		-$57
Gain on sale of land		$78
Net loss		-$109