Preparing a Multiple‐Step Income Statement

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The purpose of this assignment is to help you become familiar with the parts of the multiple‐step income statement. 

Assignment Steps

Resources: Financial Accounting: Tools for Business Decision Making

Scenario: An inexperienced accountant prepared this condensed income statement for Simon Company, a retail firm that has been in business for a number of years.

As an experienced, knowledgeable accountant, you review the statement and determine the following facts:

  1. Net sales consist of: sales $911,000, less freight-out on merchandise sold $33,000, and sales returns and allowances $28,000.
  2. Other revenues consist of sales discounts $18,000 and rent revenue $4,000.
  3. Selling expenses consist of salespersons’ salaries $80,000, depreciation on equipment $10,000, advertising $13,000, and sales commissions $6,000.  The commissions represent commissions paid. At December 21, $3,000 of commissions have been earned by salespersons but have not been paid.  All compensation should be recorded as Salaries and Wages Expense.
  4. Administrative expenses consist of office salaries $17,000, dividends $18,000, utilities $12,000, interest expense $2,000, and rent expense $24,000, which includes prepayments totaling $6,000 for the first quarter of 2018. 

Prepare a detailed multi-step income statement with a brief explanation of 200 words. Assume a 25% tax rate. I have uploaded the work sheet you will need to fill out for this assignment!! Please put this at the bottom of th excel worksheet I have provided for you to fill out!!!

Show your work on the Excel® spreadsheet and submit with your explanation.

Here is a link to the reading material

https://phoenix.vitalsource.com/books/9781119228301/epubcfi/6/28[;vnd.vst.idref=c05]!/4/2/:0.00

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