This income statement was prepared by Bob’s Bookkeeping Service for the Atlas Corporation:

Required:

A. Make a list of all the errors found on this income statement and briefly describe what is wrong.

B. Prepare a correct multistep income statement for Atlas Corporation.

Transcribed Image Text:

ATLAS CORPORATION Income Statement At December 31, 2019 Sales Interest income Less sales returns Net sales Cost of goods sold Gross margin Gain on sale of equipment Total revenue inflows Administrative expenses Selling expenses Loss on sale of land Operating income Interest expense Loss on sale of Art Division Income from continuing operations Tax expense (20%) Net income $1,200,000 5,000 9,000 $1,196,000 740,000 $ 456,000 40,000 $ 496,000 120,000 45,000 10,000 $ 321,000 9,000 20,000 $ 292,000 $ 58,400 $ 233,600