Concept Introduction:
Income Statement:
Income Statement is the part of the financial statement which is prepared to calculate the net income earned by the organization. In the income statement, all expenses are subtracted from the revenues to calculate the net income. It is prepared for a particular period.
There are two ways to present and income statement: Single-step and Multi-step. In the, multi-step income statement the net income calculated after showing multiple steps. In this statement operating and items are separate from non operating items.
Requirement-1:
To Indicate:
A organization of given items in a single step income statement.
Concept Introduction:
Income Statement:
Income Statement is the part of the financial statement which is prepared to calculate the net income earned by the organization. In the income statement, all expenses are subtracted from the revenues to calculate the net income. It is prepared for a particular period.
There are two ways to present and income statement: Single-step and Multi-step. In the, multi-step income statement the net income calculated after showing multiple steps. In this statement operating and items are separate from non operating items.
Requirement-2:
To Indicate:
The information useful for assessing the ability to generate the future income.
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CORNERSTONES OF FINAN.ACCT.>CUSTOM<
- Exercise 1-35 Accounting Concepts OBJECTIVE 06° A list of accounting concepts and related definitions is presented below. Concept Definition 1. Revenue a. Owners claim on the resources of a company 2, Expense b. The difference between revenues and expenses 3. Net income (1055) c. Increase in assets from the sale of goods or services 4, Dividend d. Economic resumes of a company 5. Asset e. Cost of assets consumed in the operation of a business 6, Liability f. Creditors' claims on the resources of a company 7. Stock holders, equity g. Distribution of earnings to stockholders Required: Match each of the concepts with its corresponding definitionarrow_forwardProblem 1-57B The Fundamental Accounting Equation Information for TTL Inc. is given below. Required: Use the relationships in the balance sheep income statement, and retained earnings statement to determine the missing values.arrow_forwardExercise 1-48 Income Statement The following information is available for Wright Auto Supply at December 31, 2019. Required: 1. Prepare a single-step income statement for the year ended December 31, 2019. 2. Prepare a multiple-step income statement for the year ended December 31, 2,019. 3. CONCEPTUAL CONNECTION Comment on the differences between the single-step and the multiple-step income statements.arrow_forward
- Exercise 1-31 Decisions Based on Accounting Information Decision-makers use accounting information in a wide variety Of decisions including the following: 1. Deciding whether or not to lend money to a business 2. Deciding whether or not an individual has paid enough in taxes 3. Deciding whether or not to place merchandise on sale in order to reduce inventory 4. Deciding whether Or not to invest in a business 5. Deciding whether or not to demand additional benefits for employees Required: Match each decision with one of the following decision-makers who is primarily responsible for the decision: a government (G), an investor (I), a labor union (U), business managers (M), or a bank (B).arrow_forwardMultiple-Step Income Statement and Profit Margin Refer to the list of income statement items in Problem 2-6. Assume that Shaw Corporation classifies all operating expenses into two categories: (1) selling and (2) general and administrative. Required Prepare a multiple-step income statement for the current year. What advantages do you see in this form for the income statement? Compute Shaws profit margin. Comment on Shaws profitability. What other factors need to be taken into account to assess Shaws profitability?arrow_forwardProblem 1-57A Accounting Relationships Information for Beethoven Music Company is given below. Required: Use the relationships in the balance sheet. income statement. and retained earnings statement to determine the missing values.arrow_forward
- Exercise 1-36 The Fundamental Accounting Equation Financial information for three independent cases is given below Required: Compute the missing numbers in each case.arrow_forwardReturn on assets The financial statements of The Hershey Company (HSY) are shown in Exhibits 6 through 9 of this chapter. Based upon these statements, answer the following questions. What is the percentage of net income to sales for Hershey? Round to one decimal place.arrow_forwardIncome statement items Based on the data presented in Exercise 1.10, identify those items that would appear on the income statement.arrow_forward
- Income statement items Based on the data presented in Exercise 1-16, identify those items that would appear on the income statement.arrow_forwardSingle-Step Income Statement The following income statement items, arranged in alphabetical order, are taken from the records of Corbin Enterprises for the current year: Required Prepare a single-step income statement for the current year. What weaknesses do you see in this form for the income statement?arrow_forwardMultiple-step income statement On March 31, 20Y5, the balances of the accounts appearing in the ledger of Lange Daughters Inc. are as follows: a. Prepare a multiple-step income Statement for the year ended March 31, 20Y5. b. Compare the major advantages and disadvantages of the multiple-step and single-step forms of income statements.arrow_forward
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