Prepare Multi-step Income StatementAs shown in the picture, use the information obtained from the Trial Balance of Andros Dry Goods for the month ended December 31, 2019 to prepare a multi-step income statement and answer the questions that follow. Cash$30,000Account receivable16,000Prepaid insurance12,000Purchases20,000Freight in500Merchandise inventory (Dec. 1, 2019)General and Administrative Expenses6,0008,000Gross Sales60,000Sales returns & allowances10,000Selling expensesInterest paid on loan taken7,000800Interest reccived from investments1600Note: On physical stock taking at the end of themonth it was found that inventory of dry goodson hand amounted to $6,500.

Income statement: All revenues and expenses are recorded in income statement. It tells the net…

As shown in the picture, use the information obtained from the Trial Balance of Andros Dry Goods for the month ended December 31, 2019 to prepare a multi-step income statement and answer the questions that follow.

As shown in the picture, use the information obtained from the Trial Balance of Andros Dry Goods for the month ended December 31, 2019 to prepare a multi-step income statement and answer the questions that follow.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Prepare Multi-step Income Statement

Cash
$30,000
Account receivable
16,000
Prepaid insurance
12,000
Purchases
20,000
Freight in
500
Merchandise inventory (Dec. 1, 2019)
General and Administrative Expenses
6,000
8,000
Gross Sales
60,000
Sales returns & allowances
10,000
Selling expenses
Interest paid on loan taken
7,000
800
Interest reccived from investments
1600
Note: On physical stock taking at the end of the
month it was found that inventory of dry goods
on hand amounted to $6,500.

Definition Definition Statement that shows the ending balance of all the ledger accounts of a firm at the end of the accounting period. The trial balance is prepared after all the entries have been posted to the ledger accounts and assists in preparing the final accounts of a firm.

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