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 2017 information related to Concord Company ($000 omitted).Administrative expense      Officers' salaries $5,330    Depreciation of office furniture and equipment 4,390Cost of goods sold 61,000Rent revenue 17,660Selling expense      Delivery expense 3,120    Sales commissions 8,410    Depreciation of sales equipment 6,910Sales revenue 96,930Income tax 9,500Interest expense 2,290Common shares outstanding for 2017 total 40,550 (000 omitted). Prepare an income statement for the year 2017 using the multiple-step form. (Round earnings per share to 2 decimal places, e.g. 1.48.)CONCORD COMPANYIncome Statement December 31, 2017For the Year Ended December 31, 2017For the Quarter Ended December 31, 2017(In thousands, except earnings per share)   $      ExpensesGross Profit / (Loss)Income Before Income TaxIncome From OperationsNet Income / (Loss)Operating ExpensesRevenuesTotal ExpensesTotal RevenuesSelling ExpensesAdministrative ExpensesTotal Selling ExpensesTotal Administrative ExpensesOther Revenues and GainsOther Expenses and Losses    ExpensesGross Profit / (Loss)Income Before Income TaxIncome From OperationsNet Income / (Loss)Operating ExpensesRevenuesTotal ExpensesTotal RevenuesSelling ExpensesTotal Selling ExpensesAdministrative ExpensesTotal Administrative ExpensesOther Revenues and GainsOther Expenses and Losses    ExpensesGross Profit / (Loss)Income Before Income TaxIncome From OperationsNet Income / (Loss)Operating ExpensesRevenuesTotal ExpensesTotal RevenuesSelling ExpensesTotal Selling ExpensesTotal Administrative ExpensesOther Revenues and GainsOther Expenses and LossesEarnings Per Share    $            ExpensesGross Profit / (Loss)Income Before Income TaxIncome From OperationsNet Income / (Loss)Operating ExpensesRevenuesTotal ExpensesTotal RevenuesSelling ExpensesTotal Selling ExpensesTotal Administrative ExpensesOther Revenues and GainsOther Expenses and LossesEarnings Per Share $   ExpensesGross Profit / (Loss)Income Before Income TaxIncome From OperationsNet Income / (Loss)Operating ExpensesRevenuesTotal ExpensesTotal RevenuesTotal Selling ExpensesAdministrative ExpensesTotal Administrative ExpensesOther Revenues and GainsOther Expenses and LossesEarnings Per Share            ExpensesGross Profit / (Loss)Income Before Income TaxIncome From OperationsNet Income / (Loss)Operating ExpensesRevenuesTotal ExpensesTotal RevenuesTotal Selling ExpensesAdministrative ExpensesTotal Administrative ExpensesOther Revenues and GainsOther Expenses and LossesEarnings Per Share        ExpensesGross Profit / (Loss)Income Before Income TaxIncome From OperationsNet Income / (Loss)Operating ExpensesRevenuesTotal ExpensesTotal RevenuesSelling ExpensesAdministrative ExpensesTotal Selling ExpensesTotal Administrative ExpensesOther Revenues and GainsOther Expenses and Losses    ExpensesGross Profit / (Loss)Income Before Income TaxIncome From OperationsNet Income / (Loss)Operating ExpensesRevenuesTotal ExpensesTotal RevenuesTotal Selling ExpensesAdministrative ExpensesTotal Administrative ExpensesOther Revenues and GainsEarnings Per ShareSelling Expenses            ExpensesGross Profit / (Loss)Income Before Income TaxIncome From OperationsNet Income / (Loss)Operating ExpensesRevenuesTotal ExpensesTotal RevenuesSelling ExpensesAdministrative ExpensesTotal Selling ExpensesTotal Administrative ExpensesOther Expenses and LossesEarnings Per Share        ExpensesGross Profit / (Loss)Income Before Income TaxIncome From OperationsNet Income / (Loss)Operating ExpensesRevenuesTotal ExpensesTotal RevenuesSelling ExpensesAdministrative ExpensesTotal Selling ExpensesTotal Administrative ExpensesOther Revenues and GainsOther Expenses and Losses        ExpensesGross Profit / (Loss)Income Before Income TaxIncome From OperationsNet Income / (Loss)Operating ExpensesRevenuesTotal ExpensesTotal RevenuesSelling ExpensesAdministrative ExpensesTotal Selling ExpensesTotal Administrative ExpensesOther Revenues and GainsOther Expenses and Losses  $      Gross Profit / (Loss)Income Before Income TaxIncome From OperationsNet Income / (Loss)Operating ExpensesRevenuesTotal ExpensesTotal RevenuesSelling ExpensesAdministrative ExpensesTotal Selling ExpensesTotal Administrative ExpensesOther Revenues and GainsOther Expenses and LossesEarnings Per Share  $

Question
Asked Jul 23, 2019
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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 2017 information related to Concord Company ($000 omitted).

Administrative expense    
    Officers' salaries   $5,330
    Depreciation of office furniture and equipment   4,390
Cost of goods sold   61,000
Rent revenue   17,660
Selling expense    
    Delivery expense   3,120
    Sales commissions   8,410
    Depreciation of sales equipment   6,910
Sales revenue   96,930
Income tax   9,500
Interest expense   2,290


Common shares outstanding for 2017 total 40,550 (000 omitted).

 

Prepare an income statement for the year 2017 using the multiple-step form. (Round earnings per share to 2 decimal places, e.g. 1.48.)

CONCORD COMPANY
Income Statement
 December 31, 2017For the Year Ended December 31, 2017For the Quarter Ended December 31, 2017

(In thousands, except earnings per share)
 
   
$
 
 
   
 
 ExpensesGross Profit / (Loss)Income Before Income TaxIncome From OperationsNet Income / (Loss)Operating ExpensesRevenuesTotal ExpensesTotal RevenuesSelling ExpensesAdministrative ExpensesTotal Selling ExpensesTotal Administrative ExpensesOther Revenues and GainsOther Expenses and Losses
   
 
 ExpensesGross Profit / (Loss)Income Before Income TaxIncome From OperationsNet Income / (Loss)Operating ExpensesRevenuesTotal ExpensesTotal RevenuesSelling ExpensesTotal Selling ExpensesAdministrative ExpensesTotal Administrative ExpensesOther Revenues and GainsOther Expenses and Losses
     
 ExpensesGross Profit / (Loss)Income Before Income TaxIncome From OperationsNet Income / (Loss)Operating ExpensesRevenuesTotal ExpensesTotal RevenuesSelling ExpensesTotal Selling ExpensesTotal Administrative ExpensesOther Revenues and GainsOther Expenses and LossesEarnings Per Share
     
 
$
 
   
 
 
   
 
 
   
 ExpensesGross Profit / (Loss)Income Before Income TaxIncome From OperationsNet Income / (Loss)Operating ExpensesRevenuesTotal ExpensesTotal RevenuesSelling ExpensesTotal Selling ExpensesTotal Administrative ExpensesOther Revenues and GainsOther Expenses and LossesEarnings Per Share
 
$
 
 
 ExpensesGross Profit / (Loss)Income Before Income TaxIncome From OperationsNet Income / (Loss)Operating ExpensesRevenuesTotal ExpensesTotal RevenuesTotal Selling ExpensesAdministrative ExpensesTotal Administrative ExpensesOther Revenues and GainsOther Expenses and LossesEarnings Per Share
     
 
 
   
 
 
   
 ExpensesGross Profit / (Loss)Income Before Income TaxIncome From OperationsNet Income / (Loss)Operating ExpensesRevenuesTotal ExpensesTotal RevenuesTotal Selling ExpensesAdministrative ExpensesTotal Administrative ExpensesOther Revenues and GainsOther Expenses and LossesEarnings Per Share
 
 
 
     
 
 ExpensesGross Profit / (Loss)Income Before Income TaxIncome From OperationsNet Income / (Loss)Operating ExpensesRevenuesTotal ExpensesTotal RevenuesSelling ExpensesAdministrative ExpensesTotal Selling ExpensesTotal Administrative ExpensesOther Revenues and GainsOther Expenses and Losses
   
 
 ExpensesGross Profit / (Loss)Income Before Income TaxIncome From OperationsNet Income / (Loss)Operating ExpensesRevenuesTotal ExpensesTotal RevenuesTotal Selling ExpensesAdministrative ExpensesTotal Administrative ExpensesOther Revenues and GainsEarnings Per ShareSelling Expenses
     
 
   
 
     
 
 ExpensesGross Profit / (Loss)Income Before Income TaxIncome From OperationsNet Income / (Loss)Operating ExpensesRevenuesTotal ExpensesTotal RevenuesSelling ExpensesAdministrative ExpensesTotal Selling ExpensesTotal Administrative ExpensesOther Expenses and LossesEarnings Per Share
     
 
   
 
 ExpensesGross Profit / (Loss)Income Before Income TaxIncome From OperationsNet Income / (Loss)Operating ExpensesRevenuesTotal ExpensesTotal RevenuesSelling ExpensesAdministrative ExpensesTotal Selling ExpensesTotal Administrative ExpensesOther Revenues and GainsOther Expenses and Losses
   
 
 
   
 
 ExpensesGross Profit / (Loss)Income Before Income TaxIncome From OperationsNet Income / (Loss)Operating ExpensesRevenuesTotal ExpensesTotal RevenuesSelling ExpensesAdministrative ExpensesTotal Selling ExpensesTotal Administrative ExpensesOther Revenues and GainsOther Expenses and Losses
   
$
 
       
 Gross Profit / (Loss)Income Before Income TaxIncome From OperationsNet Income / (Loss)Operating ExpensesRevenuesTotal ExpensesTotal RevenuesSelling ExpensesAdministrative ExpensesTotal Selling ExpensesTotal Administrative ExpensesOther Revenues and GainsOther Expenses and LossesEarnings Per Share
   
$
 
 
 

 

 

 

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Expert Answer

Step 1

Multi-step income statement: The income statement represented in multi-steps with several sub-totals to report the income from principle operations and separate the other expenses and revenues which affects the net income, is referred to as multi-step income statement.

Step 2

Prepare an income statement for Concord Company using the multi-step form for the year ended December 31, 2017.

Concord Company
Income statement
For the year ended December 31, 2017
(In thousands, except earnings per share)
Particulars
|Amount (S) Amount (S)
Sales
96,930
Less: Cost of goods sold
Gross profit
Operating expenses:
Selling expenses
Delivery expense
61,000
35,930
3,120
Sales commission
8,410
Depreciation on sales equipment
Total selling expense
Administrative expense:
6,910
18,440
Office salaries
5,330
Depreciation on office funiture and equipment
Total admininstrative expenses
Income from operations
Add: Other revenues and gains:
Rent revenue
Less: Other expenses and loss
Interest expenses
Income before tax
Less: Income tax
4,390
9.720
7,770
17,660
25,430
2.290
23,140
9.500
13.640
Net income
Earnings per share
0.34
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Concord Company Income statement For the year ended December 31, 2017 (In thousands, except earnings per share) Particulars |Amount (S) Amount (S) Sales 96,930 Less: Cost of goods sold Gross profit Operating expenses: Selling expenses Delivery expense 61,000 35,930 3,120 Sales commission 8,410 Depreciation on sales equipment Total selling expense Administrative expense: 6,910 18,440 Office salaries 5,330 Depreciation on office funiture and equipment Total admininstrative expenses Income from operations Add: Other revenues and gains: Rent revenue Less: Other expenses and loss Interest expenses Income before tax Less: Income tax 4,390 9.720 7,770 17,660 25,430 2.290 23,140 9.500 13.640 Net income Earnings per share 0.34

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Step 3

Calculation of Earnings per ...

Working note:
Net income (A)
Number of shares outstanding (B)
Earnings per share (A+B)
13,640
40,550
0.34
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Working note: Net income (A) Number of shares outstanding (B) Earnings per share (A+B) 13,640 40,550 0.34

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