Question

The current​ year's statement of net income for Ken's Kitchens​, Inc. is presented below in a​ single-step format.

Requirement

Prepare Ken's Kitchens income statement using a​ multiple-step format.

Ken's Kitchens, Inc.

Income Statement

For the Year Ended December 31

Revenues and Gains

Sales

$920,000

Interest Income

350

Dividend Income

960

Gain on Sale of Investment Securities

5,700

Unrealized Gain on Trading Securities

7,000

Total Revenues and Gains

$934,010

Expenses and Losses

Cost of Goods Sold

$59,000

Selling Expenses

42,000

Sales Salaries Expense

30,000

Advertising Expense

20,000

Depreciation Expense-General

3,700

Amortization Expense-General

3,400

Office Salaries Expense

35,000

Office Supplies Expense

31,000

Loss on Asset Impairment

3,400

Legal Fees-General

2,700

Accounting Fees-General

5,100

Interest Expense

5,200

Income Tax Expense at 35%*

242,729

Total Expenses and Losses

(483,229)

Income from Continuing Operations

$450,781

Gain on Discontinued Operations-net of tax

3,835

Net Income

$454,616

*35% x ($934,010-$240,500) = 35% x $693,510 = $242,729

Answer 1

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Ken's Kitchen
Income Statement for the year ended December 31.
Particulars	Amount $	Amount $
Sales Revenue	920,000.00
Less: returns and allowances	-
Net Sales		920,000.00
Cost of goods sold		59,000.00
Gross Profit		861,000.00
Selling expense	42,000.00
Sales Salaries Expense	30,000.00
Advertising Expense	20,000.00
Depreciation Expense- General	3,700.00
Amortization Expense- General	3,400.00
Office Salaries Expense	35,000.00
Office Supplies Expense	31,000.00
Legal Fees- General	2,700.00
Accounting Fees- General	5,100.00
Operating Expense		172,900.00
Operating Income		688,100.00
Interest Income	350.00
Dividend Income	960.00
Gain on sale of investment securities	5,700.00
Unrealized Gain on trading securities	7,000.00
Loss on asset impairment	(3,400.00)
Interest expense	(5,200.00)
Other expense and income		5,410.00
Income before tax		693,510.00
Tax expense		242,729.00
Income from continuing operations		450,781.00
Gain on Discontinued Operations net of tax		3,835.00
Net Income		454,616.00