A) Prepare an income statement for the year 2017 using the multiple-step form. B

Question

A) Prepare an income statement for the year 2017 using the multiple-step form.

B) Prepare an income statement for the year 2017 using the single-step form.

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 Culver Company ($000 omitted).
Administrative expense     Officers' salaries $5,039     Depreciation of office furniture and equipment 4,099 Cost of goods sold 60,709 Rent revenue 17,369 Selling expense     Delivery expense 2,829     Sales commissions 8,119     Depreciation of sales equipment 6,619 Sales revenue 96,639 Income tax 9,209 Interest expense 1,999
Common shares outstanding for 2017 total 40,550 (000 omitted).

Explanation / Answer

INCOME STATEMENT IN MULTIPLE STEP FORM Particulars Amount Amount Sales Revenue $         96,639 Less : Cost of Goods Sold $         60,709 Gross Profit $        35,930 Less : Operating Expenses Selling Expenses Delivery Expenses $           2,829 Sales Commission $           8,119 Depreciation on sales Equipment $           6,619 $        17,567 Administrative Expenses Officers Salaries $           5,039 Depreciation of furniture and equipment $           4,099 $          9,138 Operating Income $          9,225 Non- Operarting and others Rent Revenue $        17,369 Interest Expenses $        -1,999 Net Income before Taxes $        24,595 Less : IncomeTaxes $          9,209 Net income after Taxes or Bal. Available to Shareholers $        15,386 No. of shares outstanding $        40,550 Earning per share = $            0.38 INCOME STATEMENT IN SINGLE STEP Particulars Amount Amount Sales Revenue $         96,639 Rent Revenue $         17,369 Total Revenue $    1,14,008 Less : Expenses Cost of Goods Sold $         60,709 Delivery Expenses $           2,829 Sales Commission $           8,119 Depreciation on sales Equipment $           6,619 Officers Salaries $           5,039 Depreciation of furniture and equipment $           4,099 Interest Expenses $           1,999 Total Expenses $        89,413 Net Income before Taxes $        24,595 Less : IncomeTaxes $          9,209 Net income after Taxes or Bal. Available to Shareholers $        15,386 No. of shares outstanding $        40,500 Earning per share = $            0.38

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