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Single-Step Income Statement

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(Single-step Income Statement) The financial records of LeRoi Jones Inc, were destroyed by fire at the end of 2007. Fortunately the controller had kept certain statistical data related to the income statement as presented below.
1. The beginning merchandise inventory was $92,000 and decreased 20% during the current year.
2. sales discounts amount to $17,000
3. 20,000 shred of common stock were outstanding for the entire year
4. interest expense was $20,000
5. the income tax rate is 30%
6. Cost of goods sold amounts to $500,000.
7. Administrative expenses are 20% of cost of goods, sold but only 8% of gross sales.
8. Four-fifths of the operating expenses related to sales activities.

From the foregoing information prepare an income statement for the year 2007 in single-step form.

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Solution Preview

Please see the attached file.

Point no. 1 is not necessary since we are already given the cost of goods sold and change in inventory is used for cost of goods sold calculation

First we calculate the various amounts based on the details provided.
Administrative expenses= 20% of cost of good sold
= 20% of ...

Solution Summary

The solution explains how to prepare a single-step income statement