Question

Presented below is information for Sunland Co. for the month of January 2022. Cost of goods sold $201,500 Rent expense $32,100 Freight-out 7,900 Sales discounts 9,000 Insurance expense 13,600 Sales returns and allowances 18,700 Salaries and wages expense 63,700 Sales revenue 393,500 Income tax expense 4,700 Other comprehensive income (net of $400 tax) 2,000 (a) Prepare an income statement using the multiple-step format.

Answer 1

Answer:

Sunland Co.

Income statement for the month ended January 2022.

Sales revenue                                                           393,500

Sales returns and allowances                                   (18,700)

Net Sales                                                                   374,800

Less Cost of goods sold                                          (201,500)

Gross Profit                                                                173,300

Less Operating Expenses :

Freight-out                                               7,900

Sales discounts                                       9,000

Insurance expense                                13,600

Salaries and wages expense               63,700       (94,200)

Operating Profit                                                          79,100

Less Non Operating Expenses

Income tax expense                                                  (4,700)

Net Profit for the year                                               74,400

Other comprehensive income (net of $400 tax)      2,000

Total Profit and Other Comprehensive Income      76,400

Explanation:

Multi- step Income Statement shows Income from Primary activities and Secondary activities separately as above.