19. Multi-Step Income Statement LO4 These items were taken from the financial re
ID: 2760571 • Letter: 1
Question
19.
Multi-Step Income Statement LO4
These items were taken from the financial records of Brown's Used Cars:
Utilities expense
$ 17,650
Interest expense
50
Selling expense
14,600
Administrative expense
15,230
Interest revenue
500
Cost of sales
75,620
Net sales
154,900
Required
Prepare a multi-step income statement assuming Brown's falls into the 30% tax bracket and has a December 31 year end.
Utilities expense
$ 17,650
Interest expense
50
Selling expense
14,600
Administrative expense
15,230
Interest revenue
500
Cost of sales
75,620
Net sales
154,900
Explanation / Answer
Net sales 154900 Less:cost of sales 75620 Gross margin 79280 Less: selling cost 14600 Administration cost 15230 Utilities expense 17650 Operating income 31800 Other income or expense Interest revenue 500 Interest expense -50 Net other income 450 Income before tax [31800+450] 32250 less: Tax [32250*.30] 9675 Income after tax 22575
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