eBook Show Me How Calculator Multiplestep Income statement L

eBook Show Me How Calculator Multiple-step Income statement Labels and Amount tions Income Statement Final Questi Instructions $740,900 526,350 2,507,600 180,350 3,941,800 10,500 1,611,350 170,000 971,350 250,200 20,950 7,850 Accumulated Depreciation-Building Administrative Expenses Building Cash Cost of Merchandise Sold Interest Expense Jan Brown, Capital Jan Brown, Drawing Merchandise Inventory Notes Payable Office Supplies Salaries Payable Check My Work

Solution

Answer :

Part-a - Statement showing Multi step income statemn

Prestige Furnishing Company

Income Statement

For the Year ended October,31, 2016

Particular

Amount ($)

Amount ($)

Sales

$   66,63,950

Less : Cost of Goods Sold

$ -39,41,800

Gross Profit (a)

$   27,22,150

Operating Expenses

       Selling Expense

Selling Expenses

$    7,41,050

Stores Supplies

$       93,000

$     8,34,050

       Administrative Expenses

       Administrative Expenses

$    5,26,350

Office Supplies Expenses

$       20,950

$     5,47,300

Total Operating Expenses (b)

$   13,81,350

Income From Operation (a-b)

$   13,40,800

Non -Operating Income and Expenses

         Interest Expenses

$       10,500

$         10,500

Total Non-operating (d)

$         10,500

Net Income (c-d)

$   13,30,300

Part-B : Advantage of Multi step income statement over the single step income statement is as follows :

Operating vs. Non-Operating Income : The multi-step income statement segregates operating and non-operating income. This enables you to analyze how much of net income for the period derived from normal business activities. Single-step income statements do not offer this detailed breakdown in each area, which restricts thorough analysis of income.

Detailed income statment : In each category of income is separated, but within each category, the statement provides a detailed list of major sources of revenue and expenses. This means more detailed spent analyzing financial data and putting it into the statement is provided.

Investors and financial analysts often use the data from multiple-step income statements to determine a company\'s overall health, such as its gross margin and profit margin.

Prestige Furnishing Company
Income Statement
For the Year ended October,31, 2016
Particular		Amount ($)	Amount ($)
Sales			$   66,63,950
Less : Cost of Goods Sold		$ -39,41,800
Gross Profit (a)		$   27,22,150
Operating Expenses
Selling Expense
	Selling Expenses	$    7,41,050
	Stores Supplies	$       93,000	$     8,34,050
Administrative Expenses
	Administrative Expenses	$    5,26,350
	Office Supplies Expenses	$       20,950	$     5,47,300
Total Operating Expenses (b)		$   13,81,350
Income From Operation (a-b)		$   13,40,800
Non -Operating Income and Expenses
Interest Expenses	$       10,500	$         10,500
Total Non-operating (d)		$         10,500
Net Income (c-d)		$   13,30,300