Accounting: Create a multistep income statement In its income statement for the

Question

Accounting: Create a multistep income statement

In its income statement for the year ended December 31, 2017, Carla Vista Co. reported the following condensed data. Salaries and wages expenses Cost of goods sold Interest expense Interest revenue Depreciation expense $167,000 4,420,000 50,000 320,000 220,000 $930,000 Loss on disposal of plant assets 1,974,000 Sales revenue 142,000 130,000 620,000 Income tax expense Sales discounts Utilities expense Prepare a multiple-step income statement. (List other revenues before other expenses.) CARLA VISTA CO Income Statement Calculate the profit margin and gross profit rate. (Round answer to 1 decimal place, eg. 15.2%.) Profit margin Gross profit rate

Explanation / Answer

Answer:-

Profit margin=(Net income/net sales)*100

=($127000/$4100000)*100 = 3.10%

Gross margin=(Gross profit/net sales)*100

=($2126000/$4100000)*100 = 51.9%

Carla Vista Co. Income Statement For the year ended on December 31,2017 Particulars Amount Amount $ $ Sales Revenue 4420000 Less:- Sales Discount 320000 Net Sales 4100000 Less:- Cost of goods sold 1974000 Gross profit 2126000 Less:-Opreating Expenses:- Salaries & wages expense 930000 Utilities expense 220000 Depreciation expense 620000 Total Opreating Expenses 1770000 Income from opreations 356000 Other revenues & gains Interest revenue 130000 Other expenses & losses Interest expense 142000 Loss on disposal of plant assets 167000 309000 Income before income taxes 177000 Less:-Income tax expense 50000 Net income 127000

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