Question

Exercise 4-05 a-b Two accountants for the firm of Elwes and Wright are arguing about the merits of presenting an income statement in a multiple-step versus a single-step format. The discussion involves the following 2020 information related to Coronado Company ($000 omitted). $4,990 4,050 60,660 17,320 Administrative expense Officers' salaries Depreciation of office furniture and equipment Cost of goods sold Rent revenue Selling expense Delivery expense Sales commissions Depreciation of sales equipment Sales revenue Income tax Interest expense 2,780 8,070 6,570 96,590 9,160 1,950 Common shares outstanding for 2020 total 39,200 (000 omitted).

Answer 1

CORONADO COMPANY
INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 2020
Sales revenue			96,590
Cost of goods sold			60,660
Gross profit			35,930
Operating expenses
Selling expenses
Delivery expense	2,780
Sales commissions	8,070
Depreciation of sales equipment	6,570	17,420
Administrative expenses
Officers’ salaries	4,990
Depreciation of office furniture and equipment	4,050	9,040	26,460
Income From Operations			9,470
Other Revenues and Gains
Rent revenue			17,320
			26,790
Other Expenses and Losses
Interest expense			1,950
Income before Income Tax			24,840
Income tax			9,160
Net Income			15,680
Earning Per Share			0.40
CORONADO COMPANY
INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 2020
Revenues
Sales revenue			96,590
Rent revenue			17,320
Total Revenues			113,910
Expenses
Cost of goods sold			60,660
Selling expenses			17,420
Administrative expenses			9,040
Interest expense			1,950
Total Expenses			89,070
Income before Income Tax			24,840
Income tax			9,160
Net Income			15,680
Earning Per Share			0.40