ADM 1340 Quiz: Illustration of Single-Step and Multiple-Step Income Statements (Amended).pdf

• School: University of Ottawa
• Department: Administration
• Course: ADM 1340
• Professor: Robert Collier

Document Summary

The following information was taken from the records of presley inc. , a retailer, for the year ended december 31, 2010. Presley inc. has an income tax rate of 32%. Income statement for the year ended december 31, 2010. Loss from discontinued operation of ace division (net of ,000** income tax recovery) ** gross loss on discontinued operations is ,000. Income tax savings/recovery at 32% rate is ,000. The area highlighted in yellow above on the multiple-step income statement highlights the operating part of the statement. The area below the yellow highlighted area represents the non-operating part of the statement. In other words, everything above the operating income line represents operating and everything below the operating income line represents non-operating. This is one facet of the multiple-step income statement which is missing from the single-step income statement (i. e. the multiple step differentiates operating from non-operating). In addition, the multiple-step format shows gross profit.