xercise 4-5 wo accountants for the firm of Elwes and Wright are arguing about th
ID: 2399354 • Letter: X
Question
xercise 4-5 wo accountants for the firm of Elwes and Wright are arguing about the merits of presenting an income statement in a multiple-step versus a single-step format. The discussion nvolves the following 2017 information related to Sunland Company($000 omitted) Administrative expense Officers' salaries Depreciation of office furniture and equipment Cost of goods sold Rent revenue Selling expense $5,552 4,612 61,222 17,882 Delivery expense 3,342 8,632 7,132 97,152 9,722 2,512 Sales commissions Depreciation of sales equipment Sales revenue Income tax Interest expense ommon shares outstanding for 2017 total 40,550 (000 omitted) repare an income statement for the year 2017 using the multiple-step form. (Round earnings per share to 2 decimal places, e.g. 1.48.) SUNLAND COMPANYExplanation / Answer
Multi Step Income Statement
For the year ended 2017
Particulas
Amount($) in "000"
Amount($) in "000"
Income
Sales revenue
97,152
Less:
Cost of goods sold
61,222
Gross Profit
35,930
Less:
Operating expenses:
Administrative expenses:
Officers'salaries
5,552
Depreciation of office furniture and equipment
4,612
10,164
Selling expense:
Delivery expense
3,342
Sales commissions
8,632
Depreciation of sales equipment
7,132
19,106
Operating Income
6,660
Non operating Income:
Rent revenue
17882
Less: Non operating expense (Interest expense)
2512
15,370
Net Income before tax
22,030
Less: Income tax
9,722
Net income after tax
12,308
Multi Step Income Statement
For the year ended 2017
Particulas
Amount($) in "000"
Amount($) in "000"
Income
Sales revenue
97,152
Less:
Cost of goods sold
61,222
Gross Profit
35,930
Less:
Operating expenses:
Administrative expenses:
Officers'salaries
5,552
Depreciation of office furniture and equipment
4,612
10,164
Selling expense:
Delivery expense
3,342
Sales commissions
8,632
Depreciation of sales equipment
7,132
19,106
Operating Income
6,660
Non operating Income:
Rent revenue
17882
Less: Non operating expense (Interest expense)
2512
15,370
Net Income before tax
22,030
Less: Income tax
9,722
Net income after tax
12,308
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