Question

Prepare a multi-step income statement for Basic Corporation for the year ended December 31, 2020 using the adjusted trial balance below. Show all required subtotals (this is where the grade is focused). You may handwrite on a separate piece of paper and submit a picture of your work (in the space provided) or you may type it in here. Those are the only two options. Basic Corporation Adjusted Trial Balance For the Year Ended December 31, 2020 Debit Credit Cash $ 60 Accounts Receivable 25 Inventory 40 Equipment 90 Accumulated Depreciation $ 5 Accounts Payable 35 Notes Payable 5 Common Stock 40 Retained Earnings 30 Sales Revenues 1,900 Sales Returns and Allowances 70 Sales Discounts 110 Cost of Goods Sold 1,030 Salaries and Wages Expenses 490 Office Expense 30 Interest Expense 25 Income Tax Expense 45 $ 2,015 $ 2,015.

Answer 1

All amounts are in $

Multi Step Income Statement

Particulars	Amount	Amount
Sales Revenue (Net)		1,720
Cost of goods sold		(1,030)
Gross Profit		690
Operating Expenses
Selling expenses	490
Office expenses	30
Total Operating Expense		(520)
Operating Income		170
Non Operating Income & Expenses
Interest Expense		(25)
Profit/Income before tax		145
Income Tax Expense		(45)
Net Income (Profit after tax)		100

Note :

1. Net Sales Revenue = Sales Revenue - Sales Returns - Sales discount

= 1,900 - 70 - 110

= 1,720