2. The adjusted trial balance of Cochrane Company includes the following accounts: Debit Credit Sales $595,000...

2. The adjusted trial balance of Cochrane Company includes the following accounts: Debit Credit Sales $595,000 Sales Returns and Allowances $ 47,000 Cost of Goods Sold 371,400 Salaries Expense 47,000 Advertising Expense 10,000 Rent Expense 18,000 Freight-out 7,000 Utilities Expense 12,000 Depreciation Expense 12,500 Interest Revenue 4,000 Loss Due to Vandalism 3,000 The company uses a perpetual inventory system. Instructions Prepare a multiple-step income statement for the year ended December 31, 2017.

Expert Solution

Cochrane Company Multiple-step Income Statement For the year ended December 31, 2017
Net Sales :
Sales	$ 595,000
Less: Sales Return and Allowances	($ 47,000)
Net Sales		$ 548,000
Less: Cost of Goods Sold		($ 371,400)
Gross Profit		$ 176,600
Less: Operating Expenses
Salaries Expense	$ 47,000
Advertising Expense	$ 10,000
Rent Expense	$ 18,000
Freight-out	$ 7,000
Utilities Expense	$ 12,000
Depreciation Expense	$ 12,500
Total Operating Expenses		($ 106,500)
Operating Income		$ 70,100
Non-operating items:
Interest Revenue	$ 4,000
Loss Due to Vandalism	($ 3,000)
Total Non-operating items		$ 1,000
Net Income		$ 71,100

ekkarill92 answered 3 years ago

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