Multiple-Step and Single-Step Statements of Net Income. The Tamer Tire Company provided the following partial trial balance for the current year ended December 31. The company is subject to a 40% income tax rate. Tamer Tire Company Trial Balance (Selected Accounts) For the Year Ended December 31 Account Debit Credit Dividends $ 2,300 Sales $320,000 Interest Income 12,000 Dividend Income 8,000 Gain on Flood Damage 32,000 Gain on Disposal of Plant Assets 3,400 Unrealized Gain on Trading Investments 46,000 Cost of Goods Sold 64,000 Office Supplies Expense 5,000 Advertising Expense 10,000 Office Salaries Expense 14,000 Selling Expenses 36,000 Accounting and Legal Fees-General 3,500 Sales Salaries Expense 7,000 Systems Consulting Fees-General 2,000 Depreciation Expense-General 18,000 Amortization Expense-General 11,000 Interest Expense 4,500 Loss on Asset Impairment 12,500 Loss on Discontinued Operations-Before Tax 20,000 Unrealized Loss on Available-for-Sale Bonds 5,600 Required » a. Prepare a single-step income statement. b. Prepare a multiple-step income statement.
Multiple-Step and Single-Step Statements of Net Income. The Tamer Tire Company provided the following partial trial balance for the current year ended December 31. The company is subject to a 40% income tax rate. Tamer Tire Company Trial Balance (Selected Accounts) For the Year Ended December 31 Account Debit Credit Dividends $ 2,300 Sales $320,000 Interest Income 12,000 Dividend Income 8,000 Gain on Flood Damage 32,000 Gain on Disposal of Plant Assets 3,400 Unrealized Gain on Trading Investments 46,000 Cost of Goods Sold 64,000 Office Supplies Expense 5,000 Advertising Expense 10,000 Office Salaries Expense 14,000 Selling Expenses 36,000 Accounting and Legal Fees-General 3,500 Sales Salaries Expense 7,000 Systems Consulting Fees-General 2,000 Depreciation Expense-General 18,000 Amortization Expense-General 11,000 Interest Expense 4,500 Loss on Asset Impairment 12,500 Loss on Discontinued Operations-Before Tax 20,000 Unrealized Loss on Available-for-Sale Bonds 5,600 Required » a. Prepare a single-step income statement. b. Prepare a multiple-step income statement.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:### E5-1. Multiple-Step and Single-Step Statements of Net Income
**Introduction**
The Tamer Tire Company provided its partial trial balance for the current year ending December 31. The company is subject to a 40% income tax rate.
#### Tamer Tire Company
**Trial Balance (Selected Accounts)**
*For the Year Ended December 31*
| **Account** | **Debit** | **Credit** |
|--------------------------------------------------|-----------|---------------|
| Dividends | $2,300 | |
| Sales | | $320,000 |
| Interest Income | | $12,000 |
| Dividend Income | | $8,000 |
| Gain on Flood Damage | | $32,000 |
| Gain on Disposal of Plant Assets | | $3,400 |
| Unrealized Gain on Trading Investments | | $46,000 |
| **Cost of Goods Sold** | $64,000 | |
| Office Supplies Expense | $5,000 | |
| Advertising Expense | $10,000 | |
| Office Salaries Expense | $14,000 | |
| Selling Expenses | $36,000 | |
| Accounting and Legal Fees—General | $3,500 | |
| Sales Salaries Expense | $7,000 | |
| Systems Consulting Fees—General | $2,000 | |
| Depreciation Expense—General | $18,000 | |
| Amortization Expense—General | $11,000 | |
| Interest Expense | $4,500 | |
| Loss on Asset Impairment | $12,500 | |
| Loss on Discontinued Operations—Before Tax | $20,000 | |
| Unrealized Loss on Available-for-Sale Bonds | $5,600 | |
**Required**
1. Prepare a single-step income statement.
2. Prepare a multiple-step income statement.
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