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Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281

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BuyFindarrow_forward

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281
Textbook Problem
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Multiple-Step and Single-Step In coin с Statements The following items were derived from Gold Company’s December 31 adjusted trial balance:

Chapter 5, Problem 5E, Multiple-Step and Single-Step In coin  Statements The following items were derived from Gold

Additional data:

  1. 1. Screen thousand share of common stock have been outstanding the entire year.
  2. 2. The income tax rate is 30% on all items of income.

Required:

  1. 1. Prepare a multiple-stер income statement.
  2. 2. Prepare a single step income statement.
  3. 3. Next Level Discuss how Gold Company’s income statement in Requirement I might be different if it used IFRS

1.

To determine

Prepare a multi-step income statement for Company G for the year ended December 31, 2018.

Explanation

Multi step income statement: A multiple step income statement refers to the income statement that shows the operating and non-operating activities of the business under separate head. In different steps of the multi-step income statement, principal operating activities are reported that starts from the record of sales revenue with all contra sales revenue account like sales returns, allowances and sales discounts.

Prepare a multi-step income statement for Company G for the year ended December 31, 2018.

Company G
Multi-Step Income Statement
For the Year Ended December 31, 2018
ParticularsAmountAmount
($)($)
Sales$195,000 
Less: Cost of goods sold($101,000) 
Gross profit $94,000
Operating expenses:  
Selling expenses$28,000 
General and administrative expenses$20,000 
Total operating expenses ($48,000)
Operating income

2.

To determine

Prepare a single step income statement for Company G for the year ended December 31, 2018.

3.

To determine

Discuss the manner in which the income statement in requirement 1 might be different if it is used in IFRS.

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