Question

The following information is available for Splish Brothers Corp. for the year ended December 31, 2022.

Other revenues and gains		$23,600
Other expenses and losses		4,000
Cost of goods sold		291,000
Sales discounts		4,800
Sales revenue		759,000
Operating expenses		220,000
Sales returns and allowances		10,600

Prepare a multiple-step income statement for Splish Brothers Corp. The company has a tax rate of 25%.

Answer 1

Splish Brothers Corp. Income Statement For the year ended Dec 31, 2022
Particulars		Amount
Sales:
Sales revenue		$ 759,000
Less:
Sales returns and allowances	( $ 10,600)
Sales discounts	($ 4,800)	($ 15,400)
Net Sales		$ 743,600
Less: Cost of goods sold		( $ 291,000)
Gross Profit		$ 452,600
Less: Operating expenses		( $ 220,000)
Income from operations		$ 232,600
Other Revenues and gains	$ 23,600
Other Expenses and losses	($ 4,000)
		$ 19,600
Income before income taxes		$ 252,200
Less: Income tax expense                ( $ 252,200 x 25% )		($ 63,050)
Net Income (Loss)		$ 189,150