Respuesta :
Answer:
1. For the Year Ended December 31,2014
2. Revenues
3. Sales Revenue $96,639
4. Rent Revenue $17,230
5. Total Revenues $113869
(Sales Revenue $96,639 + Rent Revenue $17,369)
6. Expenses
7. Cost of Goods Sold $60,570
8. Selling Expenses $17,567
9. Administrative Expenses $9,138
10. Interest Expense $1,860
11. Total Expenses $89135
(Cost of Goods Sold $60,570 + Selling Expenses $17,567 + Administrative Expenses $9,138 +Interest Expense $1,860)
12. Income Before Income Tax $24,734
13. Income Tax Expense $9,070
14. Net Income/Loss $15,664
(Income Before Income Tax $24,734 - Income Tax Expense $9,070)
15. Earnings Per Share $0.38
Earnings per share = ($15,664 ÷ 40,550) = $0.38
Explanation:
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 2014 info related to P. Bride Company. ($000 omitted).
From the information given, we can arranged the values as follows into a balance sheet
1. For the Year Ended December 31,2014
2. Revenues
3. Sales Revenue $96,639
4. Rent Revenue $17,230
5. Total Revenues $113869
(Sales Revenue $96,639 + Rent Revenue $17,369)
6. Expenses
7. Cost of Goods Sold $60,570
8. Selling Expenses $17,567
9. Administrative Expenses $9,138
10. Interest Expense $1,860
11. Total Expenses $89135
(Cost of Goods Sold $60,570 + Selling Expenses $17,567 + Administrative Expenses $9,138 +Interest Expense $1,860)
12. Income Before Income Tax $24,734
13. Income Tax Expense $9,070
14. Net Income/Loss $15,664
(Income Before Income Tax $24,734 - Income Tax Expense $9,070)
15. Earnings Per Share $0.38
Earnings per share = ($15,664 ÷ 40,550) = $0.38
Answer:
a. using multiple step format, the income statement is shown below:
Income statement for the year ended 2014
$ $
sales 96500
less cost of sales 60570
Gross profit 35930
Operating Expenses:
sales commission 7980
delivery expenses 2690
depreciation of office equipment 3960
Admin & office salaries 4900
total operating expenses 19530
net operating income 16400
Non operating activities:
rent revenue 17230
depreciation of sales equipment (6480)
interest expenses (1860)
total non operation 8890
net income before tax 25290
less income tax 9070
net income after tax 16220
ii. using single step format,income becomes:
income statement for the month ended 2014
$ $
Revenue:
sales 96500
rent revenue 17230
total revenue 113730
Expenses:
cost of sales 60570
delivery expenses 2690
admin & office salaries 4900
depreciation of office equipment 3960
sales commission 7980
depreciation of sales equipment 6480
income tax 9070
interest expense 1860
total expenses 97510
net income 16220
Explanation:
in a multiple step income statement presentation, the accountant is expected to follow the step by step presentation that is, he/she must group all the various activities into three headings namely,gross profit, operating income and net income. But in single step income statement presentation , all the activities including non operational activities are joined together in one to estimate the net income. However,the total net income or profit is the same in both formats.
Note: the bracket signifies minus.
