In its income statement for the year ended December 31, 2022, Pharoah Company reported the following condensed data. Salaries and wages expenses $595,200 Loss on disposal of plant assets $106,880 Cost of goods sold 1,263,360 Sales revenue 2,828,800 Interest expense 85,200 Income tax expense 32,000 Interest revenue 83,200 Sales discounts 204,800 Depreciation expense 396,800 Utilities expense 140,800 Prepare a multiple-step income statement. (List other revenues before other expenses.)
Pharoah Company
Income Statement

Net income is $86,960.

Explanation:

A multi-step income statement is an income statement which dsplayes th gross profit and the detailed of each category of expenses and incomes to arrive at a company's net income for a particular period.

A multi-step income statement can be prepared as follows:

Pharoah Company

Income statement

For the year ended December 31, 2022

Details                                                                $          

Sales revenue                                          2,828,800

Sales discounts                                        (204,800)  

Net sales revenue                                   2,624,000

Cost of goods sold                                 (1,263,360)  

Gross profit                                              1,360,640

Operating expenses:

Salaries and wages expenses                (595,200)

Depreciation expense                             (396,800)

Utilities expense                                       (140,800)  

Operating income                                      227,840

Other income (loss):

Loss on disposal of plant assets             (106,880)

Interest income (expense):

Interest expense                                        (85,200)

Interest revenue                                          83,200  

Income before tax                                      118,960

Income tax expense                                 (32,000)  

Net income                                                 86,960