Question

what is the Income statement presentation format of :
a) Net Realizable values: Reduced Cost of goods sold.
b) Realized value Approach: Increase other income

Answer 1

I can provide both formats with numbers so you can easily understood.

Net Realizable values: Reduced Cost of goods sold
Company Name
Income statement
For the year ended December 31, 2018
Sales revenue	1,200,000
Less: Sales Discounts	25,000
Less: sales return and Allowances	15,000
Net sales		1,160,000
cost of goods sold	550,000
Realized value	30,000	520,000
Gross profit		640,000
Less: operating expenses
Selling expenses	70,000
Administrative expenses	75,000
Total operating expenses		145,000
Operating income		495,000
Other income
Interest revenue	5,000
Total other income		5,000
Income before tax		500,000
Less: tax expense @ 30%		150,000
Net income		350,000

Realized value Approach: Increase other income
Company Name
Income statement
For the year ended December 31, 2018
Sales revenue	1,200,000
Less: Sales Discounts	25,000
Less: sales return and Allowances	15,000
Net sales		1,160,000
cost of goods sold		550,000
Gross profit		610,000
Less: operating expenses
Selling expenses	70,000
Administrative expenses	75,000
Total operating expenses		145,000
Operating income		465,000
Other income
Interest revenue	5,000
Realized value	30,000
Total other income		35,000
Income before tax		500,000
Less: tax expense @ 30%		150,000
Net income		350,000