Preparing Multiple-Step Income Statement

The following information is from Atlanta Corp. for the 12 months ended December 31, 2020.

Prepare a multiple-step income statement (excluding the earnings per share disclosures) assuming a tax rate of 25%. Report income tax expense in its own separate section.

Account	2020
Sales revenue	$ 640,000
Cost of goods sold	400,000
Selling and administrative expenses	120,000
Interest expense	4,000
Gain on sale of short-term investments	7,040

• Do not use negative signs with any of your answers.

Atlanta Corp.
Income Statement
For the Year Ended December 31, 2020
Cost of goods soldExpenses and lossesGain on sale of short-term investmentsGross profitIncome before income taxesIncome tax expenseInterest expenseNet incomeOperating incomeOther expenses and lossesOther revenues and gainsRevenues and gainsSales revenueSelling and administrative expenses
Cost of goods soldExpenses and lossesGain on sale of short-term investmentsGross profitIncome before income taxesIncome tax expenseInterest expenseNet incomeOperating incomeOther expenses and lossesOther revenues and gainsRevenues and gainsSales revenueSelling and administrative expenses
Cost of goods soldExpenses and lossesGain on sale of short-term investmentsGross profitIncome before income taxesIncome tax expenseInterest expenseNet incomeOperating incomeOther expenses and lossesOther revenues and gainsRevenues and gainsSales revenueSelling and administrative expenses
Operating expenses
Cost of goods soldExpenses and lossesGain on sale of short-term investmentsGross profitIncome before income taxesIncome tax expenseInterest expenseNet incomeOperating incomeOther expenses and lossesOther revenues and gainsRevenues and gainsSales revenueSelling and administrative expenses
Cost of goods soldExpenses and lossesGain on sale of short-term investmentsGross profitIncome before income taxesIncome tax expenseInterest expenseNet incomeOperating incomeOther expenses and lossesOther revenues and gainsRevenues and gainsSales revenueSelling and administrative expenses
Other revenues and gains
Cost of goods soldExpenses and lossesGain on sale of short-term investmentsGross profitIncome before income taxesIncome tax expenseInterest expenseNet incomeOperating incomeOther expenses and lossesOther revenues and gainsRevenues and gainsSales revenueSelling and administrative expenses
Other expenses and losses
Cost of goods soldExpenses and lossesGain on sale of short-term investmentsGross profitIncome before income taxesIncome tax expenseInterest expenseNet incomeOperating incomeOther expenses and lossesOther revenues and gainsRevenues and gainsSales revenueSelling and administrative expenses
Cost of goods soldExpenses and lossesGain on sale of short-term investmentsGross profitIncome before income taxesIncome tax expenseInterest expenseNet incomeOperating incomeOther expenses and lossesOther revenues and gainsRevenues and gainsSales revenueSelling and administrative expenses
Cost of goods soldExpenses and lossesGain on sale of short-term investmentsGross profitIncome before income taxesIncome tax expenseInterest expenseNet incomeOperating incomeOther expenses and lossesOther revenues and gainsRevenues and gainsSales revenueSelling and administrative expenses
Cost of goods soldExpenses and lossesGain on sale of short-term investmentsGross profitIncome before income taxesIncome tax expenseInterest expenseNet incomeOperating incomeOther expenses and lossesOther revenues and gainsRevenues and gainsSales revenueSelling and administrative expenses