SAMPLE OF MULTI-STEP FORM OF INCOME STATEMENT
Nukin Manufacturing Company, Inc.
For the Year Ended, December 31, 2008
(espressed in terms of dollars)
Gross sales from sale of goods
Less: Sales returns and discounts
COST OF GOODS SOLD:
Finished goods- beginning
Add: Cost of Goods Manufactured
Cost of Goods for Sale
Less: Finished goods- end
Cost of Goods Sold
Taxes on Salary
Total of Selling Expenses
Salaries of Officers
Total of Administrative Expenses
Total of Selling and Administrative Expenses
Income coming from Operations
Add: Interest and Dividend Income
Income from Operations after Interest/Dividend Income
Less: Interest Expense
Income before Income Tax
The computation of income is up to Income before Income Tax. This with consideration to the different tax rates being used. In order to get the Income after Tax, simply deduct the amount of income tax from income before income tax.
For purposes of comparison with the single-step form of income statement, the multi-step has different income and expenses figures. This is to give further enhancement and significance in case of financial analysis. The different figures are important in the measure of the effectiveness of management.
In all cases, the presentation of the income statement should be fairly presented and in accordance with the generally accepted accounting principles (GAAP). As much as possible, the income statement must reveal all possible information since this is used by investors, owners, government regulatory bodies and interested parties.