TSM Company's multiple-step income statement for the year ended December 2014 shows: Net sales were calculated by starting with gross sales and subtracting sales returns, allowances, and discounts. Cost of goods sold was calculated by adding opening inventory, purchases, and freight in and subtracting returns, allowances, discounts, and closing inventory. Gross profit was calculated by subtracting cost of goods sold from net sales. Total operating expenses including selling, store salaries, advertising, depreciation, freight out, rent, utilities, and insurance expenses were subtracted from gross profit to get income from operations. Other revenues from interest and gains were added to income from operations and other expenses such as interest and casualty losses were subtracted to

1. “TSM” Company
Multiple-Step Income statement
Year ended December 2014
Sales revenues:
Sales
Less: sales return and allowance
Sales discount
Net sales
Less: Cost of goods sold:
Inventory (opening)
Purchases ****
Less: purchase return and allowance ****
Purchase discount **** (****)
Net purchase ****
Add: freight in ****
Cost of goods purchased
Cost of goods available for sale
Less: Inventory (closing)
Cost of goods sold
Gross profit
Less: Operating expense
Selling expense ****
Store salaries expense ****
Advertising expense ****
Depreciation expense ****
Freight out ****
Total selling expense
Less: Administrative expense:
Rent expense ****
Utilities expense ****
Insurance expense ****
Total administrative expense
Total operating expense
Income from operations
Add: Other revenues and gains:
Interest revenue ****
****
****
****
****
(****)
****
****
****
****
(****)
****
****

2. Gain on sale of equipment
Less : Other expense and losses:
****
Interest expense ****
****Causality loss from vandalism ****
Net income ****
Prepared by
Md Parvez Khan
Jagannath University
Accounting And Information Systems
Cell: 01757424040 // 01670837247
Email: mdparvezkhan.jnu@gmail.com