Chapter 5, Problem 12QS

Preparing a multiple-step income statement P4

Save-the-Earth Co. reports the following income statement accounts for the year ended December 31. Prepare a multiple-step income statement that includes separate categories for net sales, cost of goods sold, selling expenses, and general and administrative expenses. Categorize the following accounts as selling expenses: Sales Staff Salaries and Advertising Expense. Categorize the remaining expenses as general and administrative.
Sales discounts.................... $750 Office supplies expense............... $ 500
Office salaries expense............. 2,00 Cost of goods sold................... 9,000
Rait expense-Office space......... 1,5M Sales.............................. 20,000
Advertising expense................ 500 Insurance expense................... 1,000
Sales returns and allowances........ 250 Sales staff salaries................... 2,500