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Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881

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Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881
Textbook Problem
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Problem 1-58A Arrangement of the Income Statement OBJECTIVE 9

Powers Wrecking Service demolishes old buildings and other structures and sells the salvaged materials. During 2019 Powers had $421000 of revenue from demolition services and $137,000 of revenue from salvage sales. Powers also had $1,575 of interest income from investments. Powers incurred $243,200 of wages expense. $24,150 of depreciation expense. $48,515 of supplies expense. $84,000 of rem expense. $17,300 of miscellaneous expense, and $43300 of income taxes expense.

Required:

Prepare a single-step income statement for Powers for 2019.

To determine

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.

To Prepare:

A single step income statement for Powers Wrecking Service.

Explanation

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.

A single step income statement for Powers Wrecking Service is prepared as follows:

    Powers Wrecking Service
    Single Step Income Statement
    For the year ended Dec. 31, 2019
    Revenues:  
    Demolition Revenue $425,000  
    Salvage Sales $137,000  
    Interest income $1,575  
    Total Revenues (A) $563,57...

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