Question

Marin Inc. has recorded all necessary adjusting entries, except for income tax expense, at its fiscal year end, July 31, 2021. The following information has been taken from the adjusted trial balance:

Accounts payable		$25,500		Interest expense		$4,500
Cash dividends—common		57,500		Notes payable		101,500
Common shares		200,000		Retained earnings (Aug. 1, 2020)		359,000
Cost of goods sold		314,500		Salaries expense		147,500
Dividends payable		14,300		Sales		666,500
Income tax expense		29,500		Supplies expense		11,000
Income tax payable		4,000		Unearned revenue		11,200

All accounts have normal balances and total assets equal $817,500. Marin has a 20% income tax rate.

Prepare a multiple-step income statement

Answer 1

Marine Inc.
multiple-step income statement for the year ended July 31st, 2021
	Particulars	$
	Sales	$      666,500
Less	Cost of goods Sold	$      314,500
	Gross margin	$      352,000
Less	Operating expenses (Salary + supplies)	$      158,500
	Operating income	$      193,500
Add	Nonoperating income	$                 -
Less	Nonoperating expense	$           4,500
	Income from continuing operations before tax	$      189,000
Less	Income tax	$         29,500
	Income from continuing operations after tax	$      159,500
Add/less	Discontinuing operation net of tax	$                 -
	Net income	$      159,500
Add	Other comprehensive income	$                 -
	Comprehensive income	$      159,500

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