Exercise: "W3-1, Multiple-step and Single-step Income
Statements (Chapter 4)"


The following information has been complied from the records of Faith Hill Company as a basis for an income statement for the year ended December 31, 2008.



Rental revenue $36,000
Interest on notes payable 15,000
Market appreciation on land above cost 31,000
Wages and salaries - sales 111,300
Materials and supplies - sales 15,300
Income tax 35,700
Wages and salaries - administrative 127,600
Other administrative expenses 48,700
Cost of goods sold 423,000
Net sales 875,000
Depreciation on plant assets (70% selling, 30% administrative) 65,000
Cash dividends declared 16,000


Instructions:
(a) Prepare an income statement for the year 2008 using the multiple-step form. Common shares
Outstanding for 2008 total 20,000

FAITH HILL COMPANY
Multi-Step Income Statement
For the Year Ended December 31, 2008

Title Amount
Title Amount
Title Formula

Operating Expenses
Title
Account Title Amount
Account Title Amount
Account Title Amount Formula
Title
Account Title Amount
Account Title Amount
Account Title Amount Formula Formula
Title Formula

Other Revenues and Gains
Account Title Amount
Formula
Other Expenses and Losses
Account Title Amount

Income before taxes Formula
Account Title Amount
Net income Formula

Earnings per share Formula

(b) Prepare an income statement for the year 2008 using the single-step form. Common shares
Outstanding for 2008 total 20,000 (000 omitted).

FAITH HILL COMPANY
Single-Step Income Statement
For the Year Ended December 31, 2008

Revenues
Net sales Amount
Title Amount
Total revenues Formula

Expenses
Title Amount
Title Amount
Title Amount
Title Amount
Total expenses Formula

Income before taxes Formula
Title Amount
Net income Formula

Earnings per share Formula

(c) Which one do you prefer? Discuss.
Single-step:




Multiple-step:

What is the formula fro cost of goods sold?

Cost of goods sold:
Beginning inventory
+ Net purchases
= Cost of goods available for sale
- Ending Inventory
= Cost of goods sold

As regards your first post, can you please submit your work so that we can guids you better?

Valerie, you should start your own thread for your own question instead of tagging onto someone else's.

accoutninghelp, please see the guidelines for posting homework problems:
Ask Me Help Desk - Announcements in Forum : Homework Help
Lot of stuff there to expect someone else to do. Especially #3. Are we supposed to know which you prefer?

Exercise: "W3-1, Multiple-step and Single-step Income
Statements (Chapter 4)"


The following information has been complied from the records of Faith Hill Company as a basis for an income statement for the year ended December 31, 2008.

Revenue