Multiple-Step Income Statement:

Curbstone Company

Income Statement

For the Year Ended August 31, 2019

Sales $8,595,000

Cost of merchandise sold 6,110,000

Income from operations $2,485,000

Expenses:

Selling expenses $800,000

Administrative expenses 575,000

Delivery expense 425,000

Total expenses 1,800,000

$685,000

Other expense:

Interest revenue 45,000

Gross profit $640,000

Required:

1. The income statement above contains errors. Prepare a corrected multi-step income statement.

The preparation of the corrected multi-step income statement is presented below:

Curbstone Company

Income Statement

For the Year Ended August 31, 2019

Particulars Amount

Net sales $8,595,000.00

Less: Cost of goods sold - $6,110,000.00

Gross profit $2,485,000.00

Operating expenses

Less: Selling expenses - $800,000.00

Less: Administrative expenses - $575,000.00

Less: Delivery expenses - $425,000.00

Total expenses - $1,800,000.00

Operations income $685,000.00

Non operating income

Interest revenue $45,000.00

Net income $730,000.00