Sample Income Statement- Part 2

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SAMPLE OF MULTI-STEP FORM OF INCOME STATEMENT

Nukin Manufacturing Company, Inc.

Income Statement

For the Year Ended, December 31, 2008

(espressed in terms of dollars)

REVENUES:

Gross sales from sale of goods

900,000

Less: Sales returns and discounts

9,000

Net Sales

891,000

COST OF GOODS SOLD:

Finished goods- beginning

30,000

Add: Cost of Goods Manufactured

300,000

Cost of Goods for Sale

330,000

Less: Finished goods- end

20,000

Cost of Goods Sold

310,000

GROSS PROFIT

581,000

OPERATING EXPENSES:

Selling:

Salaries

50,000

Taxes on Salary

2,000

Delivery

20,000

Supplies

9,000

Advertising

10,000

Depreciation

11,000

Total of Selling Expenses

102,000

Administrative:

Salaries of Officers

40,000

Office Salaries

20,000

Payroll

2,000

Office Supplies

23,000

Bad Debts

1,000

Depreciation

10,000

Miscellaneous

5,000

Total of Administrative Expenses

101,000

Total of Selling and Administrative Expenses

203,000

Income coming from Operations

378,000

Add: Interest and Dividend Income

1,000

Income from Operations after Interest/Dividend Income

379,000

Less: Interest Expense

9,000

Income before Income Tax

370,000

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.

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