E4-4 Two accountants for the firm of Allen and Wright are arguing about the meri

Question

E4-4 Two accountants for the firm of Allen and Wright are arguing about the merits of presenting an income statement in a multiple-step versus a single-step format. The discussion involves the following 2010 information related to Webster Company {$000 omitted). Administrative expense Officers' salaries $ 4,900 Depreciation of office furniture and equipment $3,900 Cost of goods sold $63,570 Rental revenue $17,230 Selling expense Transportation - out $2,690 Sales commissions $7,980 Depreciation of sales equipment $6,480 Sales $96,500 Income tax $7,580 Interest expense $1,860 Instructions (a) Prepare an income statement for the year 2010 using the multiple-step form. Common shares out

Explanation / Answer

ALLEN AND WRIGHT INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2012 Sales revenue Net sales Revenue $   96,500.00 Cost of goods sold $   63,570.00 Gross profit $   32,930.00 Operating Expenses Selling Expenses Transporatation-out $      2,690.00 sales commission $      7,980.00 depreciation of sales equipment $      6,480.00 $     17,150.00 Administrative Expenses Officer's salary $      4,900.00 Depreciation of office furniture and equipment $      3,960.00 $       8,860.00 $   26,010.00 Income from operations $     6,920.00 Other Revenues and Gains Rent Revenue $   17,230.00 $   24,150.00 Other expenses and Losses Interest expense $     1,860.00 Income before income tax $   22,290.00 Income Tax Expense $     7,580.00 Net Income for the year $   14,710.00 Earning per common share $             0.36

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