Sellall Department Stores reported the following amounts in its adjusted trial balance prepared as of its December 31 year-end: Administrative Expenses, $2,600; Cost of Goods Sold, $23,760; Income Tax Expense, $3,170; Interest Expense, $1,600; Interest Revenue, $200; General Expenses, $2,800; Sales Revenue, $44,000; Sales Discounts, $2,200; Sales Returns and Allowances, $1,980; and Delivery (freight-out) Expense, $320. Prepare a multistep income statement for distribution to external financial statement users.

Sellall Department Stores

Multi-step income statement

for the year end December 31,

Sales Revenue,                                     $44,000

Add: Interest Revenue,                         $200

Less: Sales Discounts,                          $2,200

Less: Sales Returns and Allowances,  $1,980

Net Revenue                                                           $40,020

Less: Cost of Goods Sold,                                      $23,760

Gross Income                                                           $16,260

Less: Operating Expenses

Administrative Expenses,         $2,600

General Expenses,                    $2,800

Delivery (freight-out) Expense, $320  

                                                                                 $5,720    

Operating Income                                                    $10,540

Less: Interest Expense,                                            $1,600

Income before tax                                                    $8,940

Less: Income Tax Expense,                                     $3,170

Net Income                                                               $5,770

Explanation:

Multi-step Income statement segregate the Operating Income and Expenses from non operating Income and Expense. It shows the gross profit and net operating income separately.

due to the changes the federal reserve is making the unused reserves will impact the economy by them facing inflation. inflation is definfed as the increase in pricing of a good or service but the decline of the value of money used for purchasing those items. when the economy has a high inflation rate, they are subject to money loss and hurt on the economy.

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explanation:

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