Question

On march 31,2019,the balance of the accounts appearing in the ledger of Racine Furnishings Company, a furniture wholesaler, are as follows

Particulars	Amount$
Accumulated Depreciation - Building	3,00,000
Administrative expenses	2,16,000
Building	10,00,000
Cash	70,000
Cost of merchandise sold	15,20,000
Interest expense	4,000
Kathy Melman,Capital	6,34,800
Kathy Melman, Drawing	70,000
Merchandise inventory	3,92,000
Notes payable	1,00,000
Office supplies	8,000
Salaries payable	3,200
Sales	25,64,000
Selling expenses	2,86,000
Store Supplies	36,000

Prepare a multiple step income statement for the year ended march 31,2019

 

Answer 1

A multiple income statement is an income statement that separates the business's operational and non-operating operations. Principal operating activities are recorded in several phases of the multi-step income statement, starting with the record of sales revenue with all contra sales revenue accounts such sales returns, allowances, and sales discounts.

 

Racine Furnishings Company

Income statement

For the year Ended march 31,2019

Particulars	Amount$	Amount$
Sales Revenue		25,64,000
Less : Cost of Goods sold		(15,20,000)
Gross profit		10,44,000
operating Expenses:
Selling expenses	2,86,000
Administrative expenses	2,16,000
Total expenses		(5,02,000)
operating income:		5,42,000
Other Revenue & Expenses :
Interest Expense		(4,000)
Net income		5,38,000

Therefore, the net income of Racine Furnishings Company is $5,38,000