Question

Multiple-Step Income Statement

Use the following information to prepare a multiple-step income statement, including the revenue section and the cost of goods sold section, for Sauter Office Supplies for the year ended December 31, 20--.

Sales	$156,876
Sales Returns and Allowances	2,344
Sales Discounts	4,155
Interest Revenue	419
Merchandise Inventory, January 1, 20--	27,769
Purchases	112,094
Purchases Returns and Allowances	5,517
Purchases Discounts	2,710
Freight-In	870
Merchandise Inventory, December 31, 20--	33,028
Wages Expense	27,611
Supplies Expense	744
Phone Expense	888
Utilities Expense	7,988
Insurance Expense	1,294
Depreciation Expense—Equipment	3,809
Miscellaneous Expense	584
Interest Expense	4,692 Sauter Office SuppliesIncome StatementFor Year Ended December 31, 20--Revenue from sales:Sales $Less sales returns and allowances $Less sales discounts Net sales $Cost of goods sold:Merchandise inventory, January 1, 20-- $Purchases $Less purchases returns and allowances $Less purchases discounts Gross profit $Add freight-in $ $Operating expenses: $ Total operating expenses $Other revenues: $Other expenses: $

Answer 1

Multi Step Income Statement

Sauter Office Supplies
Income Statement
For Year Ended December 31, 20--
Revenues
Sales			1,56,876
Less: Sales Returns & Allowances		2,344
Less: Sales Discounts		4,155	6,499
Net Sales				1,50,377
Cost of goods sold
Merchandise inventory - Jan. 1			27,769
Purchases		1,12,094
Less: Purchases returns and allowances	5,517
Less: Purchases discounts	2,710	8,227
Net purchases		1,03,867
Add: Freight-in		870
Cost of goods purchased			1,04,737
Goods available for sale			1,32,506
Less: Merchandise inventory - Dec. 31			33,028
Cost of goods sold				99,478
Gross profit				50,899
Operating expenses
Wages Expense			27,611
Supplies Expense			744
Phone Expense			888
Utilities Expense			7,988
Insurance Expense			1,294
Depreciation Expense—Equipment			3,809
Miscellaneous Expense			584
Total operating expenses				42,918
Income from operations				7,981
Other revenues:
Interest revenue			419
Other expenses:
Interest expense			4,692	4,273
Net income				3,708