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27 November, 01:46

Presented below is information for Wildhorse Co. for the month of January 2017 Cost of goods sold Freight-out Insurance expense Salaries and wages expense Income tax expense $208,700 Rent expense 9,200 Sales discounts 12,700 Sales returns and allowances 60,700 Sales revenue $33,800 8,400 18,500 396,000 5,500 Other comprehensive income (net of $400 tax) 2,000 Prepare an income statement using the multi-step format.

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  1. 27 November, 04:19
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    Answer and Explanation:

    The Preparation of income statement using the multi-step format is prepared below:-

    Wildhorse Co.

    Income statement

    using the multi-step format

    Particulars Amount

    Sales $396,000

    Less: Sales discount $8,400

    Less: Sales and return

    allowances $18,500 $26,900

    Net sales $369,100

    Less: Cost of goods sold $208,700

    Gross profit $160,400

    Operating expenses

    Freight out expenses $9,200

    Insurance expenses $12,700

    Salaries and wages

    expenses $60,700

    Rent expenses $33,800

    Total operating expenses $116,400

    Income before income taxes $44,000

    Income tax expenses $5,500

    Net income $38,500

    So, to reach at net income we simply deduct the income tax expenses from income before income taxes.
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