Financial Statements: B/S, I/S, SCF

INCOME STATEMENT PRESENTATION

Single-Step method
Revenues
Net Sales 200
Dividend Rev 50
Rental Rev 25
Total Revs 275

Expenses
COGS 100
Selling Exp 20
Admin 10
Int Exp 40
Tax expense 60
Total Exp’s 230

Net Income 45
EPS (450 shares) $0.10

Multi-Step method
OPERATING ACTIVITIES
Sales Revenue
xxx…arrive at net sales

Cost of Goods Sold

xxx…arrive at COGS
= G.P. on sales

Operating Expenses
Selling includes: Sales rep salaries, M&E, advertising, freight-out, postage,
phone/internet
Admin/general: Officer’s salaries, legal & prof services, utilities, insurance, bldg dep,
supplies

Other revenues and gains

Dividend revenue

Other expenses and losses

Interest expense

Unusual gains/losses
*Either unusual or infrequent, but not both
**NOT net of tax!!!

= Income before tax

Less: (tax)
Income from continuing Operations
DISCONTINUED OPERATIONS
(list each item, net of tax!!!)
Income before extraordinary item

EXTRAORDINARY ITEMS
Extraordinary gain – (description)
Less: applicable tax

= NET INCOME