E5-10 In its income statement for the year ended December 31, 2012, Pele Company
ID: 2345861 • Letter: E
Question
E5-10In its income statement for the year ended December 31, 2012, Pele Company reported the following condensed data.
Operating expenses $925,000 Loss on sale of equipment $10,000
Cost of goods sold 1,289,000 Net sales 2,312,000
Interest expense 70,000
Interest revenue 28,000
Instructions
(a) Prepare a multiple-step income statement. (List amounts from largest to smallest e.g. 10, 5, 3, 2. Enter all amounts as positive amounts and subtract where necessary.)
PELE COMPANY
Income Statement
For the Year Ended December 31, 2012
Net sales $
Gross profit
Income from operations
Other revenues and gains
$
Other expenses and losses
$
Net income
$
(b) Prepare a single-step income statement. (List amounts from largest to smallest e.g. 10, 5, 3, 2. Enter all amounts as positive amounts and subtract where necessary.)
PELE COMPANY
Income Statement
For the Year Ended December 31, 2012
Revenues
$
Total revenues
Expenses
$
Total expenses
Net income
$
Explanation / Answer
a) Prepare a multiple-step income statement. (List amounts from largest to smallest e.g. 10, 5, 3, 2. Enter all amounts as positive amounts and subtract where necessary.) PELE COMPANY Income Statement For the Year Ended December 31, 2012 Net sales $ Net sales 2,312,000 Less Cost of goods sold 1,289,000 Gross profit 1,023,000 less Operating expenses $925,000 Income from operations 98,000 Other revenues and gains $ Interest revenue 28,000 Other expenses and losses $ Interest expense 70,000 Loss on sale of equipment $10,000 Net income $ 46,000 (b) Prepare a single-step income statement. (List amounts from largest to smallest e.g. 10, 5, 3, 2. Enter all amounts as positive amounts and subtract where necessary.) PELE COMPANY Income Statement For the Year Ended December 31, 2012 Revenues $ Net sales 2,312,000 Interest revenue 28,000 Total revenues 2,340,0000 Expenses $ cost of goods sold 1,289,000 operating expenses 925,000 interest expense 70,000 Loss on sale of equipment 10,000 Total expenses 2,294,000 Net income 46,000
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