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1 January, 06:56

A company reports the following amount in its December 31, Year 1, income statement.

Sales revenue $ 275,000

Income tax expense $ 25,000

Non-operating revenue 105,000

Cost of goods sold 185,000

Selling expenses 55,000

Administrative expenses 35,000

General expenses 45,000

Prepare a multiple-step income statement.

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  1. 1 January, 09:30
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    Multiple-step income statement for the year ending December 31, year 1

    Sales $275,200

    Cost of Goods Sold ($185,000)

    Gross Profit $90,200

    Operating Expenses:

    Administrative Expense ($35,000)

    Selling expenses ($55,000)

    General Expense ($45,000)

    Operating Income ($44,800)

    Non-Operating Revenue $105,000

    Operating Income before tax $60,200

    Income taxes ($25,000)

    Operating Income after Tax $35,200

    Explanation:

    Multi-step Income statement segregate the Operating Income and Expenses from non operating Income and Expense. It shows the gross profit and net operating income separately.
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