Question

Prepare a multiple-step income statement for Armstrong Co. from the following data for the year ended December 31.

Sales, $755,000; cost of merchandise sold, $330,000; administrative expenses, $35,000; interest expense, $30,000; rent revenue, $25,000; selling expenses, $50,000.

Armstrong Co.
Income Statement
For the Year Ended December 31
		$
Gross profit		$
Operating expenses:
	$
Total operating expenses
		$
Other revenue and expense:
	$
		$

Answer 1

SOLUTION

SALES	755000
COST OF GOODS SOLD	330000
GROSS PROFIT (A)	425000
OPERATING EXPENSES
ADMINSTRATIVE EXPENSE	35000
SELLING EXPENSE	50000
TOTAL OPERATING EXPENSE (B)	85000
INCOME FROM OPERATIONS (A-B)	340000
OTHER REVENUE AND EXPENSE
RENT REVENUE	25000
INTEREST EXPENSE	30000
TOTAL OTHER REVENUE AND EXPENSE	55000
NET INCOME	285000