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28 March, 08:27

Suppose in its income statement for the year ended June 30, 2022, The Clorox Company reported the following condensed data (dollars in millions). Salaries and wages expenses $ 460 Research and development expense $ 114 Depreciation expense 90 Income tax expense 736 Sales revenue 7,630 Loss on disposal of plant assets 46 Interest expense 161 Cost of goods sold 3,700 Advertising expense 499 Rent expense 105 Sales returns and allowances 230 Utilities expense 60 Assume a tax rate of 34%. Prepare a multiple-step income statement.

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  1. 28 March, 08:48
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    Clorox Company

    Income statement for the year ended June 30, 2022

    Sales revenue (7,630 - 230) 7,400

    Less Cost of goods sold (3,700)

    Gross Profit 3,700

    Operating Expenses

    Salaries and wages expenses 460

    Research and development expense 114

    Advertising expense 499

    Rent expense 105

    Utilities expense 60 (1,238)

    Operating Income 2,462

    Non Operating Expenses

    Loss on disposal of plant assets 46

    Interest expense 161

    Income tax expense 736 (943)

    Net Income 1,519

    Explanation:

    A multiple - step Income statement shows a separately : the Income generated from the Company's Primary Activities known as Operating Income whilst all other income or expenses arising from Secondary Activities are categorized as Non Operating Activities.
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