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.

Question

Quinton Graham

Business

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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Natalee Wong · Answer 1

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.