Question

Corporation provided the following account balances as of the end of the current year. The company is subject to a 45​% income tax rate.

Requirement

Prepare a​ single-step and a​ multiple-step statement of net income for Bob Corporation.

Bob Corporation

Trial Balance (Selected Accounts)

For the Year Ended December 31

Account

Debit

Credit

Dividends

$29,000

Sales

$1,800,000

Interest Income

7,500

Dividend Income

5,800

Unrealized Gain on Trading Securities

24,000

Gain on Disposal of Plant Assets

28,000

Gain on Flood Damage-Before Tax

18,000

Gain on Discontinued Operations-Before Tax

31,000

Cost of Goods Sold

78,000

Sales Salaries Expense

34,000

Office Supplies Expense

25,000

Advertising Expense

88,000

Office Salaries Expense

25,000

Systems Consulting Fees-General

32,000

Selling Expenses

84,000

Accounting and Legal Fees-Administrative

38,000

Depreciation Expense-General

89,000

Amortization Expense-General

13,000

Interest Expense

30,000

Loss on Asset Impairment

66,000

Unrealized Loss on Available-for-Sale Bonds

7,000

Bob Corporation

Statement of Net Income

For the Year Ended December 31
Requirement Prepare a single-step and a multiple-step statement of net income for Bob Corporation. Prepare Bob Corporation's single-step income statement, one section at a time. Bob Corporation Statement of Net Income For the Year Ended December 31

Answer 1

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Bob Corporation
Single Step- Income Statement for the year ended December 31.
Particulars	Amount $	Amount $
Revenues
Sales Revenue	1,800,000.00
Dividend Income	5,800.00
Interest Income	7,500.00
Gain on disposal of plant assets	28,000.00
Gain on Flood damage	18,000.00
Gain on discontinued operations	31,000.00
Unrealized Gain on trading securities	24,000.00
Total Revenues		1,914,300.00
Cost of goods sold		78,000.00
Gross Profit		1,836,300.00
Expenses
Selling expense	84,000.00
Sales Salaries Expense	34,000.00
Advertising Expense	88,000.00
Depreciation Expense- General	89,000.00
Amortization Expense-General	13,000.00
Office Salaries Expense	25,000.00
Office Supplies Expense	25,000.00
Systems Consulting Fees- General	32,000.00
Accounting & Legal Fees- General	38,000.00
Interest expense	30,000.00
Loss on asset impairment	66,000.00
Total Expense		524,000.00
Income before tax		1,312,300.00
Tax expense		590,535.00
Net Income		721,765.00
Other Comprehensive Income		Amount $
Unrealized Gain on Available for sale Bonds		7,000.00
Other Comprehensive Income		7,000.00

Multi Step- Income Statement for the year ended December 31.
Particulars	Amount $	Amount $
Sales Revenue	1,800,000.00
Less: returns and allowances	-
Net Sales		1,800,000.00
Cost of goods sold		78,000.00
Gross Profit		1,722,000.00
Selling expense	84,000.00
Sales Salaries Expense	34,000.00
Advertising Expense	88,000.00
Depreciation Expense- General	89,000.00
Amortization Expense-General	13,000.00
Office Salaries Expense	25,000.00
Office Supplies Expense	25,000.00
Systems Consulting Fees- General	32,000.00
Accounting & Legal Fees- General	38,000.00
Operating Expense		428,000.00
Operating Income		1,294,000.00
Dividend Income	5,800.00
Interest Income	7,500.00
Gain on disposal of plant assets	28,000.00
Gain on Flood damage	18,000.00
Unrealized Gain on trading securities	24,000.00
Loss on asset impairment	(30,000.00)
Interest expense	(66,000.00)
Other expense and income		(12,700.00)
Income before tax		1,281,300.00
Tax expense		576,585.00
Income from continuing operations		704,715.00
Gain on Discontinued Operations before tax	31,000.00
Tax at 45%	13,950.00
Gain on Discontinued Operations after tax		17,050.00
Net Income		721,765.00
Other Comprehensive Income		Amount $
Unrealized Gain on Available for sale Bonds		7,000.00
Net Income		7,000.00