E4-9 Multiple-step income statement:
In October 31, 20Y5, the balances of the accounts appearing inthe ledger of Quality Interiors Company, a furniture wholwsaler,are as follows:
Administrative expenses $600,000 Office supplies $5,000
building $2,000,000 retained earnings $903,000
capital stock $300,000 salaries payable $12,000
cash $175,000 sales $5,000,000
cost of merchandise sold $2,500,000 Sales discounts $400,000
dividends $20,000 sales returns and allowances $100,000
interest expense $50,000 selling expenses $850,000
merchandise inventory $400,000 store supplies $15,000
notes payable $900,000
Instructions:
a. Prepare a multiple-step income statement forthe year ended October 31, 20Y5.
b. Compare the major advantages anddisadvantages of the multiple-step and single-step forms.
Income statement for merchandiser:
For the fiscal year, sales were $12,140,000, sales discountswere $250,000, sales returns and allowances were $80,000, and costof merchandise sold was $7,000,000.
Instructions:
a. What was the amount of net sales?
b. What was the amount of gross profit?