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 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 $
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 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 $
Chapter14: Corporation Accounting
Section: Chapter Questions
Problem 20EB: Trumpet and Trombone Manufacturing, Inc. began the year with a retained earnings balance of...
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Reporting Cash Flows
Reporting of cash flows means a statement of cash flow which is a financial statement. A cash flow statement is prepared by gathering all the data regarding inflows and outflows of a company. The cash flow statement includes cash inflows and outflows from various activities such as operating, financing, and investment. Reporting this statement is important because it is the main financial statement of the company.
Balance Sheet
A balance sheet is an integral part of the set of financial statements of an organization that reports the assets, liabilities, equity (shareholding) capital, other short and long-term debts, along with other related items. A balance sheet is one of the most critical measures of the financial performance and position of the company, and as the name suggests, the statement must balance the assets against the liabilities and equity. The assets are what the company owns, and the liabilities represent what the company owes. Equity represents the amount invested in the business, either by the promoters of the company or by external shareholders. The total assets must match total liabilities plus equity.
Financial Statements
Financial statements are written records of an organization which provide a true and real picture of business activities. It shows the financial position and the operating performance of the company. It is prepared at the end of every financial cycle. It includes three main components that are balance sheet, income statement and cash flow statement.
Owner's Capital
Before we begin to understand what Owner’s capital is and what Equity financing is to an organization, it is important to understand some basic accounting terminologies. A double-entry bookkeeping system Normal account balances are those which are expected to have either a debit balance or a credit balance, depending on the nature of the account. An asset account will have a debit balance as normal balance because an asset is a debit account. Similarly, a liability account will have the normal balance as a credit balance because it is amount owed, representing a credit account. Equity is also said to have a credit balance as its normal balance. However, sometimes the normal balances may be reversed, often due to incorrect journal or posting entries or other accounting/ clerical errors.
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Question
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 | |
| |
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.)
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CONCORD COMPANY
Income Statement December 31, 2017For the Year Ended December 31, 2017For the Quarter Ended December 31, 2017
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ExpensesGross
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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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