Question

Exercise 4-5 Two accountants for the firm of Elwes and Wright are arguing about the merits of presenting an income statement in a multiple-step versus a single-step format. The discussion involves the following 2017 information related to Nash Company ($000 omitted). Administrative expense Officers' salaries $5,135 Depreciation of office furniture and equipment 4,195 Cost of goods sold 60,805 Rent revenue 17,465 Selling expense Delivery expense 2,925 Sales commissions 8,215 Depreciation of sales equipment 6,715 Sales revenue 96,735 Income tax 9,305 Interest expense 2,095 Common shares outstanding for 2017 total 40,550 (000 omitted). Prepare an income statement for the year 2017 using the multiple-step form. (Round earnings per share to 2 decimal places, e.g. 1.48.) NASH COMPANY Income Statement (In thousands, except earnings per share) $ $ $ $ $ SHOW LIST OF ACCOUNTS Prepare an income statement for the year 2017 using the single-step form. (Round earnings per share to 2 decimal places, e.g. 1.48.) NASH COMPANY Income Statement (In thousands, except earnings per share) $ $ $

Answer 1

NASH COMPANY
Income Statement
For teh Year Ended 2017
Multi Step Income Statement		Amount in $ (000)
Sales		96,735
Less: Cost of Goods Sold		60,805
Gross Profit (a)		35,930
Operating Expenses
Selling expenses
Selling expense Delivery expense	2,925
Sales commissions expenses	8,215	11,140
Administrative expense
Administrative expense Officers' salaries	5,135
Depreciation of office furniture and equipment	4,195
Depreciation of sales equipment	6,715	16,045
Total operating expenses(b)		27,185
Non operating or other
Rent Revenue		17,465
Interest expense		2,095
Income Tax		9,305
Total non operating (c)		6,065
Net Profit (a-b+c)		14,810
Number of shares		40,550
Earning per share		0.37
NASH COMPANY
Income Statement
For teh Year Ended 2017
Single Step Income Statement		Amount in $ (000)
Sales	96,735
Rent Revenue	17,465	1,14,200
Expenses & Losses
Less: Cost of Goods Sold	60,805
Selling expense Delivery expense	2,925
Sales commissions expenses	8,215
Administrative expense Officers' salaries	5,135
Depreciation of office furniture and equipment	4,195
Depreciation of sales equipment	6,715
Interest expense	2,095	90,085
Income Before Taxes		24,115
Less:Income Tax		9,305
Net Income		14,810
Number of shares		40,550
Earning per share		0.37
Note-
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