Q10SE - Horngren'S Financial And Managerial Accounting

Question

Camilia Communications reported the following figures from its adjusted trial balance for its first year of business, which ended on July 31, 2018:

Cash \( 2,900                                    Cost of Goods Sold \) 18,700

Selling Expenses 1,400                            Equipment, net 9,500

Accounts Payable 4,300                           Accrued Liabilities 1,800

Common Stock 4,365                                Net Sales Revenue 29,200

Notes Payable, long-term 500                 Accounts Receivable 3,200

Merchandise Inventory 1,100                  Interest Expense 65

Administrative Expenses 3,300

Prepare Camilia Communication’s multi-step income statement for the year ended July 31, 2018.

Step-by-Step Solution

Answer

Answer

The net income of the company is $5,735. 

Step 1: Meaning of Multi-Step Income Statement

A multi-step income statement follows a different way of presenting revenues and expenses associated with a business concern. It separately reports the operating and non-operating revenues and expenses for better presentation and understanding.

Step 2: Preparation of multi-step income statement

Camilia Communications
Multi-step Income Statement
For the year ended July 31, 2018
Particulars	Amounts ($)
Net sales revenue	29,200
Less: Cost of goods sold	(18,700)
Gross profit	10,500
Operating expenses
Selling expenses	(1,400)
Administrative expenses	(3,300)
Income from operations	5,800
Other expenses
Interest expense	(65)
Net income	5735