Question

Under generally accepted accounting principles, Company's can present their income statements in 1 of 2 different formats. 1. With the information provided below, prepare 2 Income Statements for the Williams Company for the year ended December 31. 20XX. a) Single step Income Statement 3 points b) Multiple step Income Statement 5 points To earn credit, you must use Excel functions to make any related calculations. Income tax expense $250,000 Interest expense 5,000 Selling expenses 10,000 Research and development expenses 5,000 Interest income 3,000 Sales revenues 1,000,000 Administrative expenses 15,000 Gain on sale of land 5,000 Cost of goods sold expense 250,000 Foreign exchange currency gains 5,000 Increase to slow moving inventory provision 5,000 Single step Income Statement Multiple step Income Statement Wlliams Company Wlliams Company Income Statement Income Statement Period Ending Dec. 31, 20XX Period Ending Dec. 31, 20XX 2. Historically, Nike presented its Income Statement using the single step presentation approach. Eventually, Nike came under 1 points tremendous pressure to change the presentation of its Income Statement to the multiple step approach, which it did. What do you think caused Nike to come under such pressure to change its Income Statement to the multiple step approach? Please be specific in your answer (hint: think or consider some of the fundamental principles of accounting information……). 3. Use the FASB Accounting Standards Codification to research the Income Statement Presentation Format topic. 1 points Did you find any authoritative information in the Codification on basic Income Statement Presentation Format(s)? If so, where did you find the information on basic Income Statement format and what is the authoritative guidance? You must use the FASB Codification Reference numbers to earn credit.

Answer 1

Income Statements for the Williams Company

December 31. 20XX

Particulars	Amount $	Amount $
Sales revenues (-)Cost of goods sold expense   250,000 Selling Expence 10,000	1,000,000 260,000
Net Sales		740,000
Revenus:
Interest income		$3,000
Gain on sale of land		$5,000
Foreign exchange currency gains 5,000		$5000
Less Expenses:
Income tax expense	$250,000
Interest expense	$5,000
Research and development expenses 5,000	$5,000
Administrative expenses	$15,000	(275,000)
NET INCOME		478,000