Question

Multi-step Income Statements The adjusted trial balance of Mally Distributors on December 31 is shown below. MOLLY DISTRIBUTORS Adjusted Trial Balance December 31 Debit Credit $30,200 Cash Accounts Receivable 110,200 94,000 2,400 6,400 85,000 Inventory Prepaid Insurance Supplies Delivery Equipment Accumulated Depreciation Accounts Payable Common Stock $35,000 100,000 105,000 22,800 791,000 Retained Earnings Sales Revenue 513,400 123,000 40,000 6,400 4,000 16,000 6,800 16,000 $1,053,800 $1.053,800 Cost of Goods Sold Salaries Expense Rent Expense Supplies Expense Utilities Expense Depreciation Expense Insurance Expense Income Tax Expense Totals Prepare a multi-step income statement for the year ended December 31. Combine all the operating expenses into one line on the income statement for selling general and administrative expenses. Note: Do not use negative signs with your answers. MOLLY DISTRIBUTORS Income Statement For the Year Ended December 31, 2016 719,000 x Sales Revenue Cost of Goods Sold 513,400 278,000 x Gross profit on sales Operating expenses Selling, General and Administra 73,200 x 204,800 x Income before income taxes Income Tax Expense 16,000 188,800 x Net Income

Answer 1

Molly Distribution
Income Statement
December 31, 2016
Sales revenue		$791,000
Less: Cost of goods sold		($513,400)
Gross profit		$277,600
Less: Operating expenses:
Salaries expense	$123,000
Rent expense	$40,000
Supplies expense	$6,400
Utilities expense	$4,000
Depreciation expense	$16,000
Insurance expense	$6,800
Total Operating expenses		($196,200)
Income before income taxes		$81,400
Less: Income tax expense		($16,000)
Net Income		$65,400