Prepare a multiple step income statement wileyplus

intHW3

(Computation of Net Income)

Presented below are changes in all the account balances of Jackson Furniture Co. during the current year, except for retained earnings.

Increase (Decrease)

Increase (Decrease)

Cash

$85,280

Accounts Payable

$(59,160)

Accounts Receivable (net)

49,330

Bonds Payable

83,160

Inventory

128,180

Common Stock

131,870

Investments

(47,780)

Additional Paid-in Capital

14,610

Compute the net income for the current year, assuming that there were no entries in the Retained Earnings account except for net income and a dividend declaration of $22,300 which was paid in the current year.

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(Income Statement Items)

Presented below are certain account balances of Paczki Products Co.

Rental revenue

$6,540

Sales discounts

$7,870

Interest expense

12,940

Selling expenses

99,650

Beginning retained earnings

114,550

Sales

392,310

Ending retained earnings

134,450

Income tax

32,690

Dividend revenue

72,820

Cost of goods sold

184,560

Sales returns

12,990

Administrative expenses

83,500

From the foregoing, compute the following in a periodic inventory environment: (a) total net revenue, (b) net income, (c) dividends declared during the current year.

(a)

Total net revenue

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(b)

Net income

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(c)

Dividends declared

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(Multiple-step and Single-step)

Two accountants for the firm of Allen 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 2012 information related to Webster Company ($000 omitted).

Administrative expense

Officer's salaries

$ 5,580

Depreciation of office furniture and equipment

4,060

Cost of goods sold

63,100

Rental revenue

23,190

Selling expense

Transportation-out

2,690

Sales commissions

7,980

Depreciation of sales equipment

6,480

Sales

98,400

Income tax

9,070

Interest expense

1,860

(a)

Prepare an income statement for the year 2012 using the multiple-step form. Common shares outstanding for 2012 total 40,550 (000 omitted). (List multiple entries from largest to smallest amount, e.g. 10, 5, 2. Round earnings per share to 2 decimal places, e.g. 0.25 and all other answers to zero decimal places, e.g. 2,250. Enter all amounts as positive amounts and subtract where necessary.)

WEBSTER COMPANY

Income Statement

For the Year Ended December 31, 2012

(In thousands, except earnings per share)

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Gross profit

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Operating Expenses

Selling Expenses

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Administrative expenses

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Income from operations

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Other Revenues and Gains

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Other Expenses and Losses

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Income before taxes

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Net income

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Earnings per share

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(b)

Prepare an income statement for the year 2012 using the single-step form. (List multiple entries from largest to smallest amount, e.g. 10, 5, 2. Round earnings per share to 2 decimal places, e.g. 0.25 and all other answers to zero decimal places, e.g. 2,250. Enter all amounts as positive amounts and subtract where necessary.)