Principles of Financial Accounting · free preview
Multi-Step and Simple Income Statements for Merchandisers
The multi-step income statement builds from net sales through gross profit, operating income, and net income, while the simple single-step format lists all revenues and all expenses once, and both must disclose the cost of goods sold.
1. Why merchandisers need their own format
Why merchandisers need their own format
2. Building the multi-step statement
Building the multi-step statement
3. The simple income statement
The simple income statement
4. Choosing and reading the format
Choosing and reading the format
5. First subtotal in multi-step
What is the first subtotal on a multi-step merchandising income statement?
6. Gross margin percentage
A retailer shows net sales of 180,000 dollars and cost of goods sold of 108,000 dollars. What is the gross margin?
7. Simple format structure
What defines the single-step income statement?
8. Nonoperating placement
Where do interest expense and interest revenue appear on the multi-step income statement?
9. Gross profit computation
Net sales are 180,000 dollars and cost of goods sold is 108,000 dollars. Compute gross profit in dollars, number only.
10. Operating income computation
Gross profit is 72,000 dollars, selling expenses are 22,000 dollars, and administrative expenses are 18,000 dollars. Compute income from operations in dollars, number only.
Practice this interactively
Free account · instant grading · spaced review that schedules itself.
Start this course for free