Problem - Multiple- Step Income Statement and Profit Margin
A Single- Step Income Statement - The following income statement items, arranged in alphabetical order, are taken from the records of Corbin Enterprises for the year ended December 31, 2008:
Advertising expense $ 9,000
Cost of goods sold 150,000
Depreciation expense- computer 4,500
Dividend revenue 2,700
Income tax expense 30,700
Interest expense 1,900
Rent expense- office 26,400
Rent expense- salesperson's car 18,000
Sales revenue 350,000
Supplies expense- office 1,300
Utilities expense 6,750
Wages expense- office 45,600
Prepare a multiple- step income statement for the year ended December 31, 2008. What advantages do you see in this form for the income statement? Compute Corbin's profit margin. Comment on Corbin's profitability. What other factors need to be taken into account to assess Corbin's profitability?