In its income statement for the year ended December 31, 2014, Gavin Company repo

ID: 2482135 • Letter: I

Question

In its income statement for the year ended December 31, 2014, Gavin Company reported the following condensed data.

In its income statement for the year ended December 31, 2014, Gavin Company reported the following condensed data. Salaries and wages expenses $562,650 Loss on disposal of plant assets $101,035 Cost of goods sold 1,194,270 Sales revenue 2,674,100 Interest expense 85,910 Income tax expense 30,250 Interest revenue 78,650 Sales discounts 193,600 Depreciation expenses 975,100 Utilities expense 133,100 Prepare a multiple-step income statement.

Explanation / Answer

Solution-

Gavin Company

Income Statement

For the Year Ended on December 31,2014

Sales

Sales Revenue

$2,674,100

Less: Sales Discount

$193,600

Net Sales

$2,480,500

Cost of Goods Sold

$1,194,270

Gross Profit

$1,286.230

Operating Expense

Salaries and wages expenses

$562,650

Utilities expenses

$375,100

Depreciation expenses

$133,100

Total Operating Expenses

$1,070,850

Income from operations

$215,380

Other revenues and gains

Interest revenue

$78,650

Other expenses and losses

Interest expenses

$85,910

Loss in disposal of plant assets

$101,035

$186,945

Income before income taxes

$107,085

Income tax expense

$30,250

Net Income

$76,835