Question

Cole's Cookie Company
Unadjusted Trial Balance (Selected Accounts)
For the Current Year Ended
Account	Debit	Credit
Common Stock (no par): Beginning Balance		$ 472,000
Retained Earnings: Beginning Balance		1,600,000
Accumulated Other Comprehensive Income: Beginning Balance	$ 55,000
Dividends	67,000
Sales		2,400,000
Interest Income		4,600
Dividend Income		3,800
Gain on Disposal of Plant Assets		92,000
Unrealized Gain on Trading Securities		31,000
Gain on Sale of Discontinued Operations-Before Tax		66,000
Unrealized Gain on Available-for-Sale Bonds-Before Tax		5,300
Cost of Goods Sold	610,000
Selling Expenses	41,000
Office Salaries Expense	75,000
Legal Fees-General	8,200
Sales Salaries Expense	33,000
Advertising Expense	35,000
Office Supplies Expense	72,000
Accounting Fees-Administrative	14,000
Amortization Expense-General	28,000
Depreciation Expense-General	35,000
Interest Expense	8,100
Loss on Asset Impairment	9,200

Above is the Year end trial balance

Cookie Company provided the following accounts from its? year-end trial balance.

The company is subject to a 45?% income tax rate.

Requirement

Prepare a? multiple-step income statement for the current year.

Answer 1

Multiple-step Income statement:

Mulitiple-step income statement segregates Operating Income and Operating Expenses from Non-Operating Income and Non-Operating Expenses, gains and Losses.

Multiple -Step Income statement for the current year

Cole's Cookie Company Statement of Net Income For the current year ended
	$	$
Sales		2,400,000
Cost Of Goods Sold		610,000
Gross profit		1,790,000
Operating expenses
General and Administrative expenses
Office salaries expenses	75,000
Legal fees	8,200
Office supplies expenses	72,000
Accounting fees	14,000
Amortization expenses	28,000
Depreciation expenses	35,000	232,200
Sales Expenses
Selling expenses	41,000
Advertising expenses	35,000
Sales Salaries expenses	33,000	109,000
Total Operating expenses		341,200
Net Operating Income		1,448,800
Non-Operating Income and Expenses
Interest income		4,600
Dividend income		3,800
Gain on disposal of Plant assets		92,000
Unrealized gain on trading securities		31,000
Gain on sale of discontinued operations		66,000
Interest expense		(8,100)
Loss on asset Impairment		(9,200)
Net Non-Operating income		180,100
Income before Income tax		1,628,900
Income tax @45%		733,005
Net Income		895,895

Note 1:

Unrealized gain on Available for sale bonds shall not be taken into income statement and instead it shall be presented in balance sheet under "Other comprehensive Income".

Note 2:

Dividend income is not an expense and morever it is an appropriation of income