Sample Income Statement, Part 2

SAMPLE OF MULTI-STEP FORM OF INCOME STATEMENT

Nukin Manufacturing Company, Inc.

Income Statement

For the Year Ended, December 31,--

(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.