Respuesta :
Answer:
In both formats, net income is equal to $190,500
Explanation:
(a) the one statement format
The single step statement format is an income statement format that shows only one category of income and only one category of expenses. From the question, this can be prepared as follow:
Income = Net sales + unrealized holding gain on available-for-sale debt securities = $1,235,200 + $15,700 = $1,250,900
Expenses = Cost of goods sold + Selling and administrative expenses = $721,800 + $338,600 = $1,060,400
Oriole Corporation
Statement of comprehensive income
Details Amount ($)
Income 1,250,900
Expenses 1,060,400
Net income 190,500
(b) the two statement format.
The two step statement format is an income statement format that uses two category to separate income accounts based on their function by showing gross profit and other income separately to arrive operating income, and also show selling and administrative expenses on its own. This can be prepared as follows:
Oriole Corporation
Statement of comprehensive income
Details Amount ($)
Net sales 1,235,200
Cost of goods sold (721,800)
Gross profit 513,400
Other income:
Available-for-sale debt securities gain 15,700
Operating income 529,100
Expenses:
Selling and administrative expenses (338,600)
Net income 190,500
