On March 31, 2018, the balances of the accounts appearing in the ledger of Royal
ID: 2559245 • Letter: O
Question
On March 31, 2018, the balances of the accounts appearing in the ledger of Royal Furnishings Company, a furniture wholesaler, are as follows:
Accounts Receivable
$ 170,000
Accumulated Depreciation-Building
750,000
Administrative Expenses
435,000
Building
3,500,000
Cash
80,000
Common Stock
300,000
Cost of Goods Sold
5,500,000
Dividends
175,000
Interest Expense
15,000
Inventory
980,000
Notes Payable
250,000
Office Supplies
20,000
Retained Earnings
1,987,000
Salaries Payable
8,000
Sales
8,245,000
Selling Expenses
575,000
Store Supplies
90,000
A.
Prepare a multiple-step income statement for the year ended March 31, 2018. Be sure to complete the statement heading. Refer to the information given in the exercise and to the list of Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries. A colon (:) will automatically appear if it is required. In the Other income and expenses section only, enter amounts that represent other expenses as negative numbers using a minus sign.
B.
What is a major advantage of the multiple-step income statement over the single-step income statement?
Labels
For the Year Ended March 31, 2018
March 31, 2018
Operating expenses
Other revenue and expense
Amount Descriptions
Gross profit
Income from operations
Net income
Net loss
Total assets
Total liabilities
Total operating expenses
Total stockholders’ equity
A. Prepare a multiple-step income statement for the year ended March 31, 2018. Be sure to complete the statement heading. Refer to the information given in the exercise and to the list of Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries. A colon (:) will automatically appear if it is required. In the Other income and expenses section only, enter amounts that represent other expenses as negative numbers using a minus sign.
Royal Furnishings Company
Income Statement
1
2
3
4
5
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7
8
9
10
11
B. What is a major advantage of the multiple-step income statement over the single-step income statement?
The multiple-step income statement clearly presents the value of total revenues.
The multiple-step income statement clearly presents the value of total expenses.
The multiple-step income statement shows the relationship of gross profit to sales.
The multiple-step income statement is less complex to prepare.
Accounts Receivable
$ 170,000
Accumulated Depreciation-Building
750,000
Administrative Expenses
435,000
Building
3,500,000
Cash
80,000
Common Stock
300,000
Cost of Goods Sold
5,500,000
Dividends
175,000
Interest Expense
15,000
Inventory
980,000
Notes Payable
250,000
Office Supplies
20,000
Retained Earnings
1,987,000
Salaries Payable
8,000
Sales
8,245,000
Selling Expenses
575,000
Store Supplies
90,000
A.
Prepare a multiple-step income statement for the year ended March 31, 2018. Be sure to complete the statement heading. Refer to the information given in the exercise and to the list of Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries. A colon (:) will automatically appear if it is required. In the Other income and expenses section only, enter amounts that represent other expenses as negative numbers using a minus sign.
B.
What is a major advantage of the multiple-step income statement over the single-step income statement?
Labels
For the Year Ended March 31, 2018
March 31, 2018
Operating expenses
Other revenue and expense
Amount Descriptions
Gross profit
Income from operations
Net income
Net loss
Total assets
Total liabilities
Total operating expenses
Total stockholders’ equity
Explanation / Answer
1)
Royal Furnishings Company
Income Statement
2)correct option is "C"
The multiple-step income statement shows the relationship of gross profit to sales.
Royal Furnishings Company
Income Statement
sales 8245000 less:cost of goods sold (5500000) Gross margin 2745000 Less:selling and administrative expense Administrative Expenses (435000) Selling Expenses (575000) Total selling and administrative expense (1010000) Operating income 1735000 other Income /(expense) Interest expense (15000) Net Income 1720000Related Questions
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