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Prepare a multiple-step income statement for Jackrabbit Inc. from the following single-step...

Question:

Prepare a multiple-step income statement for Jackrabbit Inc. from the following single-step statement.

Net sales $1,840,000
Gain on sale of equipment 15,000
Interest income 13,000
Costs and expenses: 1,868,000
Cost of goods sold 1,072,000
Selling expenses 270,000
General and admin expenses 155,000
Depreciation 24,000
Equity losses 9,000
Interest expense 16,000
Income tax expense 96,000
Net income $226,000

What Is An Income Statement:

A company's Income Statement is one of the four core statements prepared under GAAP. The Income Statement shows the amount of revenue generated in a period, the amount of operating and non-operating expenses incurred, and the resulting income.

Answer and Explanation:

See below.

Item $
Net sales 1,840,000
Cost of goods sold 1,072,000
Gross profit =1,840,000 -1,072,000 768,000
Selling expenses 270,000
General and admin expenses 155,000
Depreciation 24,000
Operating income =768,000-270,000 -155,000 -24,000 319,000
Other income
Gain on sale of equipment 15,000
Interest income 13,000
Equity losses -9,000
Interest expense -16,000
Income before tax =319,000+15,000 +13,000 -9,000 -16,000 322,000
Income tax expense 96,000
Net income 226,000

Learn more about this topic:

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What Is an Income Statement? - Purpose, Components & Format

from Accounting 101: Financial Accounting

Chapter 2 / Lesson 2
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