Preparing a Multi-Step Income Statement using Excel's IF and Basic Math Functions Reading Readiness, Inc. has provided you its list of accounts and balances as of January 31. The Controller has asked you to prepare an Income Statement for the month ended January 31. Use the information included in the Excel Simulation and the Excel functions described below to complete the task. - Cell Reference: Allows you to refer to data from another cell in the worksheet. From the Excel Simulation below, if in a blank cell, "=B5" was entered, the formula would output the result from cell B5, or $37,500 in this example. - Basic Math functions: Allows you to use the basic math symbols to perform mathematical functions. You can use the following keys; + (plus sign to add), - (minus sign to subtract), " (asterisk sign to multiply), and / (forward slash to divide). From the Excel Simulation below, if in a blank cell * Cl1+C12was entered, the formula would add the values from those cells and output the result, or 28,800 in this example. If using the other math symbols the result would output an appropriate answer for its function. - SUM function: Allows you to refer to multiple cells and adds all the values. You can add individual cell references or ranges to utilize this function. From the Excel Simulation below, if in a blank cell "=SUM(C11,C12,C13)" was entered, the formula would output the result of adding those three separate cells, or 103,800 in this example. Similarly, if in a blank cell * "SUM(C11:C13)" was entered, the formula would output the same result of adding those cells, except they are expressed as a range in the formula, and the result would be 103,800 in this example. - IF function: Allows you to test a condition and return a specific value is the result is true and different value if the result is false. The syntax of the IF function is "=IF(test_condition,value_if_true,value_if_false)" and specific considerations need to be made when using this function. The test_condition argument is an evaluation of the status of a cell, such as if the value of a cell is greater than, less than, or equal to another number or cell. The value_if_true and value_if_false arguments will return any specific result for each option, such as another cell reference, a value, or text. Throughout the entire equation, if text is being used in the test_condition, value_if_true, or value_if false arguments then the text itself should be entered in quotations so that Excel will recognize the text as a "string of text" instead of another function. From the Excel Simulation below, if in a blank cell "=IF(B5>20000,"Cash is great", "Cash is bad") was entered, the formula would output the result of the value if true since the test condition would be result as true, or in this case the text "Cash is great". Excel processes the IF function by separating it out into separate parts. First the test condition - Excel thinks, find cell 85 and determine if the value is greater than 20000 . Once Excel determines if the result of that test_condition is TRUE or FALSE, it will return the value_if_true or value_if false. \begin{tabular}{|l|l|l|} \hline 36 & \multicolumn{2}{|c|}{ For the Year Ended December 31, 20X1} \\ \hline 37 & \multicolumn{1}{|c|}{} \\ \hline 38 & Less: & \\ \hline 39 & & \\ \hline 40 & & \\ \hline 41 & Net Sales & \\ \hline 42 & & \\ \hline 43 & Gross Profit & \\ \hline 44 & Expenses: & \\ \hline 45 & & \\ \hline 46 & & \\ \hline 47 & \\ \hline 48 & Income from Operations & \\ \hline 49 & \\ \hline 50 & Income before Income Tax Expense & \\ \hline 51 & \\ \hline 52 & & \\ \hline 53 & & \\ \hline 54 & 3. Compute the gross profit percentage. & \\ \hline 55 & Note: Make sure to include 100 at the end of your formula \\ \hline 56 & in order to convert the decimal to a percentage. \\ \hline 57 & Gross Profit Percentage & \\ \hline 58 & \end{tabular} Paste B I U Conditional Format as Cell Cells Editing Clipboard Font Formatting : Table - Styles: A1 fs Noodles Unlimited, Inc. sells swimming pool toys. The following adjusted trial A B C D 1 Noodles Unlimited, Ine, sells swimming pool toys. The following adjusted trial balance 2 is for the year ended December 31,201. \begin{tabular}{|c|c|c|c|} \hline 3 & & & \\ \hline 4 & Account Titles & Debits & Credits \\ \hline 5 & Cash & $37,500 & \\ \hline 6 & Accounts Receivable & 28,600 & \\ \hline 7 & Inventory & 43,300 & \\ \hline 8 & Prepaid Rent & 2,000 & \\ \hline 9 & Equipment & 69,000 & \\ \hline 10 & Accumulated Depreciation & & $20,700 \\ \hline 11 & Accounts Payable & & 8,800 \\ \hline 12 & Notes Payable & & 20,000 \\ \hline 13 & Common Stock & & 75,000 \\ \hline 14 & Retained Earnings, January 1, 20X1 & & 31,800 \\ \hline 15 & Sales Revenue & & 175,500 \\ \hline 16 & Sales Returns and Allowances & 4,700 & \\ \hline 17 & Sales Discounts & 6,000 & \\ \hline 18 & Cost of Goods Sold & 67,700 & \\ \hline 19 & Salaries and Wages Expense & 25,900 & \\ \hline 20 & Depreciation Expense & 13,800 & \\ \hline 21 & Rent Expense & 24,000 & \\ \hline 22 & Interest Expense & 1,600 & \\ \hline 23 & Income Tax Expense & 7,700 & \\ \hline 24 & Totals & $331.800 & $331.800 \\ \hline \end{tabular} READY Required: 1. Prepare a multistep income statement that would be used for internal reporting purposes. Note: When more than one correct account could appear in a cell, list items in order of largest to smallest dollar amounts. Use cell referencing to select account titles and values. All numbers should appear as positive numbers. 2. After entering the formula in cell B52, use the Excel IF function to label cell A52 as either "Net Income" or "Net Loss" as appropriate based on the value calculated in cell B52. Preparing a Multi-Step Income Statement using Excel's IF and Basic Math Functions Reading Readiness, Inc. has provided you its list of accounts and balances as of January 31. The Controller has asked you to prepare an Income Statement for the month ended January 31. Use the information included in the Excel Simulation and the Excel functions described below to complete the task. - Cell Reference: Allows you to refer to data from another cell in the worksheet. From the Excel Simulation below, if in a blank cell, "=B5" was entered, the formula would output the result from cell B5, or $37,500 in this example. - Basic Math functions: Allows you to use the basic math symbols to perform mathematical functions. You can use the following keys; + (plus sign to add), - (minus sign to subtract), " (asterisk sign to multiply), and / (forward slash to divide). From the Excel Simulation below, if in a blank cell * Cl1+C12was entered, the formula would add the values from those cells and output the result, or 28,800 in this example. If using the other math symbols the result would output an appropriate answer for its function. - SUM function: Allows you to refer to multiple cells and adds all the values. You can add individual cell references or ranges to utilize this function. From the Excel Simulation below, if in a blank cell "=SUM(C11,C12,C13)" was entered, the formula would output the result of adding those three separate cells, or 103,800 in this example. Similarly, if in a blank cell * "SUM(C11:C13)" was entered, the formula would output the same result of adding those cells, except they are expressed as a range in the formula, and the result would be 103,800 in this example. - IF function: Allows you to test a condition and return a specific value is the result is true and different value if the result is false. The syntax of the IF function is "=IF(test_condition,value_if_true,value_if_false)" and specific considerations need to be made when using this function. The test_condition argument is an evaluation of the status of a cell, such as if the value of a cell is greater than, less than, or equal to another number or cell. The value_if_true and value_if_false arguments will return any specific result for each option, such as another cell reference, a value, or text. Throughout the entire equation, if text is being used in the test_condition, value_if_true, or value_if false arguments then the text itself should be entered in quotations so that Excel will recognize the text as a "string of text" instead of another function. From the Excel Simulation below, if in a blank cell "=IF(B5>20000,"Cash is great", "Cash is bad") was entered, the formula would output the result of the value if true since the test condition would be result as true, or in this case the text "Cash is great". Excel processes the IF function by separating it out into separate parts. First the test condition - Excel thinks, find cell 85 and determine if the value is greater than 20000 . Once Excel determines if the result of that test_condition is TRUE or FALSE, it will return the value_if_true or value_if false. \begin{tabular}{|l|l|l|} \hline 36 & \multicolumn{2}{|c|}{ For the Year Ended December 31, 20X1} \\ \hline 37 & \multicolumn{1}{|c|}{} \\ \hline 38 & Less: & \\ \hline 39 & & \\ \hline 40 & & \\ \hline 41 & Net Sales & \\ \hline 42 & & \\ \hline 43 & Gross Profit & \\ \hline 44 & Expenses: & \\ \hline 45 & & \\ \hline 46 & & \\ \hline 47 & \\ \hline 48 & Income from Operations & \\ \hline 49 & \\ \hline 50 & Income before Income Tax Expense & \\ \hline 51 & \\ \hline 52 & & \\ \hline 53 & & \\ \hline 54 & 3. Compute the gross profit percentage. & \\ \hline 55 & Note: Make sure to include 100 at the end of your formula \\ \hline 56 & in order to convert the decimal to a percentage. \\ \hline 57 & Gross Profit Percentage & \\ \hline 58 & \end{tabular} Paste B I U Conditional Format as Cell Cells Editing Clipboard Font Formatting : Table - Styles: A1 fs Noodles Unlimited, Inc. sells swimming pool toys. The following adjusted trial A B C D 1 Noodles Unlimited, Ine, sells swimming pool toys. The following adjusted trial balance 2 is for the year ended December 31,201. \begin{tabular}{|c|c|c|c|} \hline 3 & & & \\ \hline 4 & Account Titles & Debits & Credits \\ \hline 5 & Cash & $37,500 & \\ \hline 6 & Accounts Receivable & 28,600 & \\ \hline 7 & Inventory & 43,300 & \\ \hline 8 & Prepaid Rent & 2,000 & \\ \hline 9 & Equipment & 69,000 & \\ \hline 10 & Accumulated Depreciation & & $20,700 \\ \hline 11 & Accounts Payable & & 8,800 \\ \hline 12 & Notes Payable & & 20,000 \\ \hline 13 & Common Stock & & 75,000 \\ \hline 14 & Retained Earnings, January 1, 20X1 & & 31,800 \\ \hline 15 & Sales Revenue & & 175,500 \\ \hline 16 & Sales Returns and Allowances & 4,700 & \\ \hline 17 & Sales Discounts & 6,000 & \\ \hline 18 & Cost of Goods Sold & 67,700 & \\ \hline 19 & Salaries and Wages Expense & 25,900 & \\ \hline 20 & Depreciation Expense & 13,800 & \\ \hline 21 & Rent Expense & 24,000 & \\ \hline 22 & Interest Expense & 1,600 & \\ \hline 23 & Income Tax Expense & 7,700 & \\ \hline 24 & Totals & $331.800 & $331.800 \\ \hline \end{tabular} READY Required: 1. Prepare a multistep income statement that would be used for internal reporting purposes. Note: When more than one correct account could appear in a cell, list items in order of largest to smallest dollar amounts. Use cell referencing to select account titles and values. All numbers should appear as positive numbers. 2. After entering the formula in cell B52, use the Excel IF function to label cell A52 as either "Net Income" or "Net Loss" as appropriate based on the value calculated in cell B52