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25 May, 16:12

Beasley, Inc., reports the following amounts in its December 31, 2021, income statement. Sales revenue $ 350,000 Income tax expense $ 36,000 Interest expense 13,000 Cost of goods sold 120,000 Salaries expense 35,000 Advertising expense 25,000 Utilities expense 45,000 Prepare a multiple-step income statement.

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  1. 25 May, 16:17
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    Instructions are listed below.

    Explanation:

    Giving the following information:

    Sales revenue $350,000

    Income tax expense $36,000

    Interest expense $13,000

    Cost of goods sold $120,000

    Salaries expense $35,000

    Advertising expense $25,000

    Utilities expense $45,000

    The multiple-step income statement uses the following structure:

    Sales

    Less:

    Cost of goods sold

    = Gross margin

    Less:

    Operating expenses:

    Selling expenses

    Administrative expenses

    = income from operations

    Less:

    Interest expense

    Tax expense

    = Net income

    For this case:

    Sales = 350,000

    COGS = (120,000)

    Gross profit = 230,000

    Operating expenses:

    Salaries expense = (35,000)

    Advertising expense = (25,000)

    Utilities expense (45,000)

    Income from operations = 125,000

    Income tax expense = (36,000)

    Interest expense = (13,000)

    Net income = 76,000
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