Question:
Refer to the situation described in BE 4–1. If the company’s accountant prepared a multiple-step income
statement, what amount would appear in that statement for (a) operating income and (b) nonoperating
income?
Answer:
(a) Sales revenue $2,106
Less: Cost of goods sold (1,240)
Gross profit 866
Less: Selling expenses (126)
General and administrative expenses (105)
Operating income $ 635
(b) Gain on sale of investments 45
Interest expense (35)
Nonoperating income $10
Refer to the situation described in BE 4–1. If the company’s accountant prepared a multiple-step income
statement, what amount would appear in that statement for (a) operating income and (b) nonoperating
income?
Answer:
(a) Sales revenue $2,106
Less: Cost of goods sold (1,240)
Gross profit 866
Less: Selling expenses (126)
General and administrative expenses (105)
Operating income $ 635
(b) Gain on sale of investments 45
Interest expense (35)
Nonoperating income $10
