Summary operating data for Custom Wire & Tubing Company during the year ended April 30, 2019, are as follows: cost of merchandise sold, $6,100,000; administrative expenses, $740,000; interest expense, $25,000; rent revenue, $60,000; sales, $9,332,500; and selling expenses, $1,250,000. Prepare a single-step income statement. Refer to the lists of Labels, Accounts, and Amount Descriptions provided for the exact wording of the answer choices for text entries.

Answer and Explanation:

The preparation of the single step income statement is presented below:

                             Custom Wire & Tubing Company

                                           Income Statement

Particulars                       Amount($)

Sales                                9,332,500

less: cost of goods sold (6,100,000)

Gross profit                       3,232,500

Add: rent revenues            60,000

less: expenses:

Administrative expenses  (740,000)

Selling expenses              (1,250,000)

Interest expenses               (25,000)

Net Income                         1,277,500

We simply added the revenues and deducted all expenses so that the net income could arrive

answertaxable income;