Sellall Department Stores reported the following amounts in its adjusted trial balance prepared as of its December 31 year-end: Administrative Expenses, $2,000; Cost of Goods Sold, $20,520; Income Tax Expense, $2,870; Interest Expense, $1,500; Interest Revenue, $180; General Expenses, $2,200; Sales Revenue, $38,000; Sales Discounts, $1,900; Sales Returns and Allowances, $1,710; and Delivery (freight-out) Expense, $260. Prepare a multistep income statement for distribution to external financial statement users.

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mltn1980 mltn1980 · Answer 1 · 2019-10-13T23:44:07+02:00

Answer:

Dec 31 Income Statement

$ 38,000 Sales

-$ 1,900 Sales Discount

-$ 1,710 Sales returns and allowances

$ 34,390 Net Sales Revenues

-$ 20,520 Cost of goods sold

$ 13,870 Gross PROFIT

-$ 2,000 Administrative expense

-$ 2,200 General expenses

-$ 0,260 Delivery Expenses

-$ 4,460 Operating EXPENSES

$ 9,410 Operating INCOME

-$ 1,500 Interest Expenses

$ 0,180 Interest Revenue

-$ 1,320 NonOperating EXPENSES

$ 8,090 NET INCOME AFTER TAXES

-$ 2,870 Income Tax Expenses

$ 5,220 Net INCOME

Explanation:

In the multistep income it's possible to segregate the operative expenses and

revenues of the non operative, it also shows the gross profit, which is the Net Sales Revenues less the Costo of Goods Sold.

First it's shown the Gross Profit, then substracted the operating expenses

to arrive at operating income.

Finally with the non operating movements we have the net Income After Taxes and the with the taxes expenses we have the Net Income of the company.