In 2016, Kim Company sold land for $99,000 cash. The land had originally cost $4

Question

In 2016, Kim Company sold land for $99,000 cash. The land had originally cost $46,000. Also, Kim sold inventory that had cost $188,000 for $291,000 cash. Operating expenses amounted to $33,000 Required a. Prepare a 2016 multistep income statement for Kim Company KIM COMPANY Income Statement For the year ended 31, 2016 Expenses Non-Operating Items b. Assume that normal operating activities grow evenly by 17% during 2017 Prepare a 2017 munstep income statement for Kim Company KIM COMPANY Income Statement For the year ended December 31, 2017 Expenses Non-Operating items

Explanation / Answer

Answer = A MULTI STEP INCOME STATEMENT FOR THE YEAR 2016 Amount Amount Sales Revenue $           2,91,000 Less: Cost of Goods Sold $           1,88,000 Gross Profit $       1,03,000 Less: Operating Expenses $           33,000 Total Operating Expenses $           33,000 Operating Income $           70,000 Non-Operating and others Income from Sale of Land ($ 99,000 - $ 46,000) $           53,000 Net Income $       1,23,000 Answer = B MULTI STEP INCOME STATEMENT FOR THE YEAR 2017 Amount Amount Sales Revenue ($ 291,000 X 1.17) = $           3,40,470 Less: Cost of Goods Sold ($ 188,000 x 1.17) = $           2,19,960 Gross Profit $       1,20,510 Less: Operating Expenses ($ 33,000 x 1.17) $           38,610 Total Operating Expenses $           38,610 Operating Income $           81,900 Non-Operating and others $                    -   Net Income $           81,900 Answer = C % Change in net income = Income for the year 2016 = $              81,900 Income for the year 2017 = $           1,23,000 Change in net income = $             -41,100 % Change in net income = $ 41,100 / $ 123,000 = -33.41%

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