Question

Prepare a multiple-step income statement for Armstrong Co. from the following data for the year ended December 31.

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Sales, $755,000; cost of goods sold, $330,000; administrative expenses, $35,000; interest expense, $30,000; rent revenue, $25,000; selling expenses, $50,000.

Answer 1

Solution - Multiple Step Income Statement

Particulars	Working	Amount
Sales		$7,55,000
Less: Cost of merchandise sold		($3,30,000)
Gross profit		$4,25,000
Admn. Expenses	$35,000
Selling expenses	$50,000
Less: Operating Expenses		($85,000)
Operating Income		$3,40,000
Add : Other Income	$25,000
Less: Interest expense	($30,000)
Non Operating income/loss		($5,000)
Net Income		$3,35,000

Answer 2

ARMSTRONG CO.

Income Statement

For the Year Ended December 31, 20XX

Sales		$755,000
Less: Cost of goods sold		($330,000)
Gross profit		$425,000
Less: Operating expenses
Administrative expenses	($35,000)
Selling expenses	($50,000)
Total operating expenses		($85,000)
Operating income		$340,000
Other revenue and expenses:
Rent revenue	$25,000
Interest expense	($30,000)	($5,000)
Net income		$335,000