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    The document provides an income statement for Dibb Company for the year 2007 using both a multiple-step and single-step format. Key details include: - Sales were $198,000 - Cost of goods sold was $130,000 - Operating expenses were $45,000 - There was a $5,000 loss on the sale of land - Extraordinary gain (pre-tax) was $6,000 - Income tax rate was 30% - Net income for 2007 was $16,800 under both the multiple-step and single-step formats.

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    53 views2 pages
    The document provides an income statement for Dibb Company for the year 2007 using both a multiple-step and single-step format. Key details include: - Sales were $198,000 - Cost of goods sold was $130,000 - Operating expenses were $45,000 - There was a $5,000 loss on the sale of land - Extraordinary gain (pre-tax) was $6,000 - Income tax rate was 30% - Net income for 2007 was $16,800 under both the multiple-step and single-step formats.

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    1311698

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    The document provides an income statement for Dibb Company for the year 2007 using both a multiple-step and single-step format. Key details include: - Sales were $198,000 - Cost of goods sold was $130,000 - Operating expenses were $45,000 - There was a $5,000 loss on the sale of land - Extraordinary gain (pre-tax) was $6,000 - Income tax rate was 30% - Net income for 2007 was $16,800 under both the multiple-step and single-step formats.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    53 views2 pages

    Required

    Uploaded by

    mohitgaba19
    The document provides an income statement for Dibb Company for the year 2007 using both a multiple-step and single-step format. Key details include: - Sales were $198,000 - Cost of goods sold was $130,000 - Operating expenses were $45,000 - There was a $5,000 loss on the sale of land - Extraordinary gain (pre-tax) was $6,000 - Income tax rate was 30% - Net income for 2007 was $16,800 under both the multiple-step and single-step formats.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    of 2

    E5-1        Simple Income Statement  The following are selected accounts taken from the adjusted trial balance of the Dibb

    Company on December 31, 2007:


    Loss on sale of land $   5,000
    Cost of goods sold 130,000

    Twelve thousand shares of common stock were outstanding the entire  year.
    Required
    Assuming a 30% income tax rate on all items of income, prepare a 2007 income statement for Dibb Company using (1) a m
    m the adjusted trial balance of the Dibb

    Sales (net) $198,000


    Operating expenses 45,000
    Extraordinary gain (pretax) 6,000

    statement for Dibb Company using (1) a multiple-step format and (2) a single-step format.
    INCOME STATEMENT
    (1)multiple step format
    Net Sales $ 198,000
    less: Cost of Goods Sold $ 130,000
    Gross Profit $ 68,000
    less: Operating expenses $ 45,000
    Operating Income $ 23,000
    Other Items
    Loss on sale of land $ 5,000
    Income before income tax and extraordinary items $ 18,000
    less: Tax @ 30 % $ 5,400
    Income before extraordinary items $ 12,600
    add: extraordinary gain(net of tax) $ 4,200
    ($ 6,000 less 30 % fo $ 6,000)
    Net Income $ 16,800

    (2) single step format


    Net Sales $ 198,000
    less: Cost of Goods Sold $ 130,000
    less: Operating expenses $ 45,000
    less: Loss on sale of land $ 5,000
    Income before income tax and extraordinary items $ 18,000
    less: Tax @ 30 % $ 5,400
    add: extraordinary gain(net of tax) $ 4,200
    ($ 6,000 less 30 % fo $ 6,000)
    Net Income $ 16,800

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