Exercise 4-5 (Part Level Submission) (a) Exercise 4-5 (Part Level Submission) Tw

Question

Exercise 4-5 (Part Level Submission)

(a)

Exercise 4-5 (Part Level Submission)

Two 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 involves the following 2017 information related to Tamarisk Company ($000 omitted).
Administrative expense     Officers' salaries $5,168     Depreciation of office furniture and equipment 4,228 Cost of goods sold 60,838 Rent revenue 17,498 Selling expense     Delivery expense 2,958     Sales commissions 8,248     Depreciation of sales equipment 6,748 Sales revenue 96,768 Income tax 9,338 Interest expense 2,128
Common shares outstanding for 2017 total 40,550 (000 omitted).

Explanation / Answer

TAMARISK COMPANY Income Statement For the Year Ended December 31, 2017 (In thousands, except earnings per share) Sales Revenue 96768 Cost of Goods sold 60838 Gross Profit 35930 Operating Expenses Selling Expenses Delivery Expenses 2958 Sales Commissions 8248 Depreciation of Sales equipment 6748 17954 Administrative/General expenses officers' salaries 5168 Depreciation of office furniture and equipment 4228 9396 27350 Income from Operations 8580 Other revenues and gains Rent Revenue 17498 26078 Other expenses and losses Interest expense 2128 Income before taxes 23950 Income tax 9338 Net income 14612 Earnings per share 0.36

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