Question

Fit-for-Life Foods reports the following income statement accounts for the year ended December 31.
Gain on sale of equipment $ 6,250 Depreciation expensesOffice copier $ 500
Office supplies expense 700 Sales discounts 16,000
Insurance expense 1,300 Sales returns and allowances 4,000
Sales 220,000 TV advertising expense 2,000
Office salaries expense 32,500 Interest revenue 750
Rent expenses Selling space 10,000 Cost of goods sold 90,000
Sales staff wages 23,000 Sales commission expense 13,000
Prepare a multiple-step income statement.

Answer 1

Answer:

                        Fit-for-Life Foods

Multi Step Income Statement  for the year ended 31 Dec

                                                       $                       $

Sales                                                                $220,000

Sales Discounts                          $16,000  

Sales returns & Allowances       $4,000          $20,000

Net Sales                                                          $200,000

Cost of Goods Sold                                          $90,000

Gross Profits                                                      $110,000

Expenses  

Selling Expenses:  

Rent Expenses Selling Space   $10,000  

Sales Staff Wages                      $23,000  

TV Advertising Expense            $2,000  

Sales Commission Expense      $13,000  

Total Selling expenses               $48,000         ($48,000)

 

General & Administrative expenses:  

Office Supplies expense             $700  

Insurance expense                      $1,300  

Office Salaries Expenses            $32,500  

Depreciation expense                 $500

Office Copier

Total general and administrative  $35,000      ($35,000)

expenses

Operating Income                                                $27,000

Other Revenues, gains expense and losses:  

Gain on Sale of Equipment         $6,250  

Interest Revenue                          $750  

Total other revenues gains          $7,000           ($7,000)

expenses and losses

Net Income                                                          $20,000