OBJECTIVE 6 Exercise 1-46 Income Statement ERS Inc. maintains and repairs office equipment. ERS had an average of 10,000 shares of common stock outstanding for the year. The following income statement account balances are available for ERS at the end of 2019. Required: 1. Prepare a single-step income statement for ERS for 2019. 2. CONCEPTUAL CONNECTION Compute net profit margin for ERS. If ERS is able to increase its service revenue by $100,000, what should be the effect on future income? 3. CONCEPTUAL CONNECTION Assume that ERS net profit margin was 8.5% for 2018. As an investor, what conclusions might you draw about ERS’ future profitability?

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Answer 1

Textbook Question

Chapter 1, Problem 46E

OBJECTIVE 6 Exercise 1-46 Income Statement

ERS Inc. maintains and repairs office equipment. ERS had an average of 10,000 shares of common stock outstanding for the year. The following income statement account balances are available for ERS at the end of 2019.

Chapter 1, Problem 46E, OBJECTIVE 6 Exercise 1-46 Income Statement ERS Inc. maintains and repairs office equipment. ERS had

Required:

1. Prepare a single-step income statement for ERS for 2019.

2. CONCEPTUAL CONNECTION Compute net profit margin for ERS. If ERS is able to increase its service revenue by $100,000, what should be the effect on future income?

3. CONCEPTUAL CONNECTION Assume that ERS net profit margin was 8.5% for 2018. As an investor, what conclusions might you draw about ERS’ future profitability?

Expert Solution

To determine

Concept Introduction:

Income Statement:

Income Statement is the part of the financial statement which is prepared to calculate the net income earned by the organization. In the income statement, all expenses are subtracted from the revenues to calculate the net income. It is prepared for a particular period.

There are two ways to present and income statement: Single-step and Multi-step. In the, multi-step income statement the net income calculated after showing multiple steps. In this statement operating and items are separate from non operating items.

Requirement-1:

To Prepare:

The Single step income statement.

Answer to Problem 46E

The Single step income statement is as follows:

ERS Inc.
Single Step Income Statement
For the month of January 2019
Revenue:
Service revenue	$ 933,800
Total Revenue		$ 933,800
Expenses:
Cost of Goods Sold
Utilities Expense	$ 26,100
Wages Expense	$ 448,300
Salaries Expense	$ 195,600
Rent Expense	$ 58,400
Depreciation expense	$ 16,250
Advertising expense	$ 24,200
Income tax Expense	$ 15,150
Insurance Expense	$ 10,100
Supplies Expense	$ 66,400
Interest Expense	$ 10,100
Total Expense		$ 870,600
Net Income		$ 63,200

Explanation of Solution

There are two ways to present and income statement: Single-step and Multi-step. In the, multi-step income statement the net income calculated after showing multiple steps. In this statement operating and items are separate from non operating items.

The Single step income statement is prepared as follows:

ERS Inc.
Single Step Income Statement
For the month of January 2019
Revenue:
Service revenue	$ 933,800
Total Revenue		$ 933,800
Expenses:
Cost of Goods Sold
Utilities Expense	$ 26,100
Wages Expense	$ 448,300
Salaries Expense	$ 195,600
Rent Expense	$ 58,400
Depreciation expense	$ 16,250
Advertising expense	$ 24,200
Income tax Expense	$ 15,150
Insurance Expense	$ 10,100
Supplies Expense	$ 66,400
Interest Expense	$ 10,100
Total Expense		$ 870,600
Net Income		$ 63,200

Expert Solution

To determine

Concept Introduction:

Income Statement:

Income Statement is the part of the financial statement which is prepared to calculate the net income earned by the organization. In the income statement, all expenses are subtracted from the revenues to calculate the net income. It is prepared for a particular period.

There are two ways to present and income statement: Single-step and Multi-step. In the, multi-step income statement the net income calculated after showing multiple steps. In this statement operating and items are separate from non operating items.

Requirement-2:

To Prepare:

The Net profit margin and effect on net income if sales revenue increases by $100,000.

Answer to Problem 46E

The Net profit margin is 6.77%. The Net income shall increase by $6,770 if sales revenue increases by $100,000.

Explanation of Solution

The Net profit margin is calculated as follows;

Net profit margin= Net profit / Sales = 63200/933800 =0.0677 = 6.77%

The Net income shall increase by 100000*6.77% = $6,770 if sales revenue increases by $100,000.

Expert Solution

To determine

Concept Introduction:

Income Statement:

Income Statement is the part of the financial statement which is prepared to calculate the net income earned by the organization. In the income statement, all expenses are subtracted from the revenues to calculate the net income. It is prepared for a particular period.

There are two ways to present and income statement: Single-step and Multi-step. In the, multi-step income statement the net income calculated after showing multiple steps. In this statement operating and items are separate from non operating items.

Requirement-3:

To Discuss:

The future profitability of the company.

Answer to Problem 46E

The profit of the company is declining and it may decline in future also.

Explanation of Solution

The Net profit margin is 6.77% in the year 2019 and it was 8.5% for 2018 it means the profit of the company is declining and it may decline in future also.

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Answer 2

Textbook Question

Chapter 1, Problem 46E

OBJECTIVE 6 Exercise 1-46 Income Statement

ERS Inc. maintains and repairs office equipment. ERS had an average of 10,000 shares of common stock outstanding for the year. The following income statement account balances are available for ERS at the end of 2019.

Chapter 1, Problem 46E, OBJECTIVE 6 Exercise 1-46 Income Statement ERS Inc. maintains and repairs office equipment. ERS had

Required:

1. Prepare a single-step income statement for ERS for 2019.

2. CONCEPTUAL CONNECTION Compute net profit margin for ERS. If ERS is able to increase its service revenue by $100,000, what should be the effect on future income?

3. CONCEPTUAL CONNECTION Assume that ERS net profit margin was 8.5% for 2018. As an investor, what conclusions might you draw about ERS’ future profitability?

Expert Solution

To determine

Concept Introduction:

Income Statement:

Income Statement is the part of the financial statement which is prepared to calculate the net income earned by the organization. In the income statement, all expenses are subtracted from the revenues to calculate the net income. It is prepared for a particular period.

There are two ways to present and income statement: Single-step and Multi-step. In the, multi-step income statement the net income calculated after showing multiple steps. In this statement operating and items are separate from non operating items.

Requirement-1:

To Prepare:

The Single step income statement.

Answer to Problem 46E

The Single step income statement is as follows:

ERS Inc.
Single Step Income Statement
For the month of January 2019
Revenue:
Service revenue	$ 933,800
Total Revenue		$ 933,800
Expenses:
Cost of Goods Sold
Utilities Expense	$ 26,100
Wages Expense	$ 448,300
Salaries Expense	$ 195,600
Rent Expense	$ 58,400
Depreciation expense	$ 16,250
Advertising expense	$ 24,200
Income tax Expense	$ 15,150
Insurance Expense	$ 10,100
Supplies Expense	$ 66,400
Interest Expense	$ 10,100
Total Expense		$ 870,600
Net Income		$ 63,200

Explanation of Solution

There are two ways to present and income statement: Single-step and Multi-step. In the, multi-step income statement the net income calculated after showing multiple steps. In this statement operating and items are separate from non operating items.

The Single step income statement is prepared as follows:

ERS Inc.
Single Step Income Statement
For the month of January 2019
Revenue:
Service revenue	$ 933,800
Total Revenue		$ 933,800
Expenses:
Cost of Goods Sold
Utilities Expense	$ 26,100
Wages Expense	$ 448,300
Salaries Expense	$ 195,600
Rent Expense	$ 58,400
Depreciation expense	$ 16,250
Advertising expense	$ 24,200
Income tax Expense	$ 15,150
Insurance Expense	$ 10,100
Supplies Expense	$ 66,400
Interest Expense	$ 10,100
Total Expense		$ 870,600
Net Income		$ 63,200

Expert Solution

To determine

Concept Introduction:

Income Statement:

Income Statement is the part of the financial statement which is prepared to calculate the net income earned by the organization. In the income statement, all expenses are subtracted from the revenues to calculate the net income. It is prepared for a particular period.

There are two ways to present and income statement: Single-step and Multi-step. In the, multi-step income statement the net income calculated after showing multiple steps. In this statement operating and items are separate from non operating items.

Requirement-2:

To Prepare:

The Net profit margin and effect on net income if sales revenue increases by $100,000.

Answer to Problem 46E

The Net profit margin is 6.77%. The Net income shall increase by $6,770 if sales revenue increases by $100,000.

Explanation of Solution

The Net profit margin is calculated as follows;

Net profit margin= Net profit / Sales = 63200/933800 =0.0677 = 6.77%

The Net income shall increase by 100000*6.77% = $6,770 if sales revenue increases by $100,000.

Expert Solution

To determine

Concept Introduction:

Income Statement:

Income Statement is the part of the financial statement which is prepared to calculate the net income earned by the organization. In the income statement, all expenses are subtracted from the revenues to calculate the net income. It is prepared for a particular period.

There are two ways to present and income statement: Single-step and Multi-step. In the, multi-step income statement the net income calculated after showing multiple steps. In this statement operating and items are separate from non operating items.

Requirement-3:

To Discuss:

The future profitability of the company.

Answer to Problem 46E

The profit of the company is declining and it may decline in future also.

Explanation of Solution

The Net profit margin is 6.77% in the year 2019 and it was 8.5% for 2018 it means the profit of the company is declining and it may decline in future also.

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Answer 3

Textbook Question

Chapter 1, Problem 46E

OBJECTIVE 6 Exercise 1-46 Income Statement

ERS Inc. maintains and repairs office equipment. ERS had an average of 10,000 shares of common stock outstanding for the year. The following income statement account balances are available for ERS at the end of 2019.

Chapter 1, Problem 46E, OBJECTIVE 6 Exercise 1-46 Income Statement ERS Inc. maintains and repairs office equipment. ERS had

Required:

1. Prepare a single-step income statement for ERS for 2019.

2. CONCEPTUAL CONNECTION Compute net profit margin for ERS. If ERS is able to increase its service revenue by $100,000, what should be the effect on future income?

3. CONCEPTUAL CONNECTION Assume that ERS net profit margin was 8.5% for 2018. As an investor, what conclusions might you draw about ERS’ future profitability?

Expert Solution

To determine

Concept Introduction:

Income Statement:

Income Statement is the part of the financial statement which is prepared to calculate the net income earned by the organization. In the income statement, all expenses are subtracted from the revenues to calculate the net income. It is prepared for a particular period.

There are two ways to present and income statement: Single-step and Multi-step. In the, multi-step income statement the net income calculated after showing multiple steps. In this statement operating and items are separate from non operating items.

Requirement-1:

To Prepare:

The Single step income statement.

Answer to Problem 46E

The Single step income statement is as follows:

ERS Inc.
Single Step Income Statement
For the month of January 2019
Revenue:
Service revenue	$ 933,800
Total Revenue		$ 933,800
Expenses:
Cost of Goods Sold
Utilities Expense	$ 26,100
Wages Expense	$ 448,300
Salaries Expense	$ 195,600
Rent Expense	$ 58,400
Depreciation expense	$ 16,250
Advertising expense	$ 24,200
Income tax Expense	$ 15,150
Insurance Expense	$ 10,100
Supplies Expense	$ 66,400
Interest Expense	$ 10,100
Total Expense		$ 870,600
Net Income		$ 63,200

Explanation of Solution

There are two ways to present and income statement: Single-step and Multi-step. In the, multi-step income statement the net income calculated after showing multiple steps. In this statement operating and items are separate from non operating items.

The Single step income statement is prepared as follows:

ERS Inc.
Single Step Income Statement
For the month of January 2019
Revenue:
Service revenue	$ 933,800
Total Revenue		$ 933,800
Expenses:
Cost of Goods Sold
Utilities Expense	$ 26,100
Wages Expense	$ 448,300
Salaries Expense	$ 195,600
Rent Expense	$ 58,400
Depreciation expense	$ 16,250
Advertising expense	$ 24,200
Income tax Expense	$ 15,150
Insurance Expense	$ 10,100
Supplies Expense	$ 66,400
Interest Expense	$ 10,100
Total Expense		$ 870,600
Net Income		$ 63,200

Expert Solution

To determine

Concept Introduction:

Income Statement:

Income Statement is the part of the financial statement which is prepared to calculate the net income earned by the organization. In the income statement, all expenses are subtracted from the revenues to calculate the net income. It is prepared for a particular period.

There are two ways to present and income statement: Single-step and Multi-step. In the, multi-step income statement the net income calculated after showing multiple steps. In this statement operating and items are separate from non operating items.

Requirement-2:

To Prepare:

The Net profit margin and effect on net income if sales revenue increases by $100,000.

Answer to Problem 46E

The Net profit margin is 6.77%. The Net income shall increase by $6,770 if sales revenue increases by $100,000.

Explanation of Solution

The Net profit margin is calculated as follows;

Net profit margin= Net profit / Sales = 63200/933800 =0.0677 = 6.77%

The Net income shall increase by 100000*6.77% = $6,770 if sales revenue increases by $100,000.

Expert Solution

To determine

Concept Introduction:

Income Statement:

Income Statement is the part of the financial statement which is prepared to calculate the net income earned by the organization. In the income statement, all expenses are subtracted from the revenues to calculate the net income. It is prepared for a particular period.

There are two ways to present and income statement: Single-step and Multi-step. In the, multi-step income statement the net income calculated after showing multiple steps. In this statement operating and items are separate from non operating items.

Requirement-3:

To Discuss:

The future profitability of the company.

Answer to Problem 46E

The profit of the company is declining and it may decline in future also.

Explanation of Solution

The Net profit margin is 6.77% in the year 2019 and it was 8.5% for 2018 it means the profit of the company is declining and it may decline in future also.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Textbook Question

Chapter 1, Problem 46E

OBJECTIVE 6 Exercise 1-46 Income Statement

ERS Inc. maintains and repairs office equipment. ERS had an average of 10,000 shares of common stock outstanding for the year. The following income statement account balances are available for ERS at the end of 2019.

Chapter 1, Problem 46E, OBJECTIVE 6 Exercise 1-46 Income Statement ERS Inc. maintains and repairs office equipment. ERS had

Required:

1. Prepare a single-step income statement for ERS for 2019.

2. CONCEPTUAL CONNECTION Compute net profit margin for ERS. If ERS is able to increase its service revenue by $100,000, what should be the effect on future income?

3. CONCEPTUAL CONNECTION Assume that ERS net profit margin was 8.5% for 2018. As an investor, what conclusions might you draw about ERS’ future profitability?

Expert Solution

To determine

Concept Introduction:

Income Statement:

Income Statement is the part of the financial statement which is prepared to calculate the net income earned by the organization. In the income statement, all expenses are subtracted from the revenues to calculate the net income. It is prepared for a particular period.

There are two ways to present and income statement: Single-step and Multi-step. In the, multi-step income statement the net income calculated after showing multiple steps. In this statement operating and items are separate from non operating items.

Requirement-1:

To Prepare:

The Single step income statement.

Answer to Problem 46E

The Single step income statement is as follows:

ERS Inc.
Single Step Income Statement
For the month of January 2019
Revenue:
Service revenue	$ 933,800
Total Revenue		$ 933,800
Expenses:
Cost of Goods Sold
Utilities Expense	$ 26,100
Wages Expense	$ 448,300
Salaries Expense	$ 195,600
Rent Expense	$ 58,400
Depreciation expense	$ 16,250
Advertising expense	$ 24,200
Income tax Expense	$ 15,150
Insurance Expense	$ 10,100
Supplies Expense	$ 66,400
Interest Expense	$ 10,100
Total Expense		$ 870,600
Net Income		$ 63,200

Explanation of Solution

There are two ways to present and income statement: Single-step and Multi-step. In the, multi-step income statement the net income calculated after showing multiple steps. In this statement operating and items are separate from non operating items.

The Single step income statement is prepared as follows:

ERS Inc.
Single Step Income Statement
For the month of January 2019
Revenue:
Service revenue	$ 933,800
Total Revenue		$ 933,800
Expenses:
Cost of Goods Sold
Utilities Expense	$ 26,100
Wages Expense	$ 448,300
Salaries Expense	$ 195,600
Rent Expense	$ 58,400
Depreciation expense	$ 16,250
Advertising expense	$ 24,200
Income tax Expense	$ 15,150
Insurance Expense	$ 10,100
Supplies Expense	$ 66,400
Interest Expense	$ 10,100
Total Expense		$ 870,600
Net Income		$ 63,200

Expert Solution

To determine

Concept Introduction:

Income Statement:

Income Statement is the part of the financial statement which is prepared to calculate the net income earned by the organization. In the income statement, all expenses are subtracted from the revenues to calculate the net income. It is prepared for a particular period.

There are two ways to present and income statement: Single-step and Multi-step. In the, multi-step income statement the net income calculated after showing multiple steps. In this statement operating and items are separate from non operating items.

Requirement-2:

To Prepare:

The Net profit margin and effect on net income if sales revenue increases by $100,000.

Answer to Problem 46E

The Net profit margin is 6.77%. The Net income shall increase by $6,770 if sales revenue increases by $100,000.

Explanation of Solution

The Net profit margin is calculated as follows;

Net profit margin= Net profit / Sales = 63200/933800 =0.0677 = 6.77%

The Net income shall increase by 100000*6.77% = $6,770 if sales revenue increases by $100,000.

Expert Solution

To determine

Concept Introduction:

Income Statement:

Income Statement is the part of the financial statement which is prepared to calculate the net income earned by the organization. In the income statement, all expenses are subtracted from the revenues to calculate the net income. It is prepared for a particular period.

There are two ways to present and income statement: Single-step and Multi-step. In the, multi-step income statement the net income calculated after showing multiple steps. In this statement operating and items are separate from non operating items.

Requirement-3:

To Discuss:

The future profitability of the company.

Answer to Problem 46E

The profit of the company is declining and it may decline in future also.

Explanation of Solution

The Net profit margin is 6.77% in the year 2019 and it was 8.5% for 2018 it means the profit of the company is declining and it may decline in future also.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Textbook Question

Answer 6

Textbook Question

Answer 7

Expert Solution

To determine

Concept Introduction:

Income Statement:

Income Statement is the part of the financial statement which is prepared to calculate the net income earned by the organization. In the income statement, all expenses are subtracted from the revenues to calculate the net income. It is prepared for a particular period.

There are two ways to present and income statement: Single-step and Multi-step. In the, multi-step income statement the net income calculated after showing multiple steps. In this statement operating and items are separate from non operating items.

Requirement-1:

To Prepare:

The Single step income statement.

Answer to Problem 46E

The Single step income statement is as follows:

ERS Inc.
Single Step Income Statement
For the month of January 2019
Revenue:
Service revenue	$ 933,800
Total Revenue		$ 933,800
Expenses:
Cost of Goods Sold
Utilities Expense	$ 26,100
Wages Expense	$ 448,300
Salaries Expense	$ 195,600
Rent Expense	$ 58,400
Depreciation expense	$ 16,250
Advertising expense	$ 24,200
Income tax Expense	$ 15,150
Insurance Expense	$ 10,100
Supplies Expense	$ 66,400
Interest Expense	$ 10,100
Total Expense		$ 870,600
Net Income		$ 63,200

Explanation of Solution

There are two ways to present and income statement: Single-step and Multi-step. In the, multi-step income statement the net income calculated after showing multiple steps. In this statement operating and items are separate from non operating items.

The Single step income statement is prepared as follows:

ERS Inc.
Single Step Income Statement
For the month of January 2019
Revenue:
Service revenue	$ 933,800
Total Revenue		$ 933,800
Expenses:
Cost of Goods Sold
Utilities Expense	$ 26,100
Wages Expense	$ 448,300
Salaries Expense	$ 195,600
Rent Expense	$ 58,400
Depreciation expense	$ 16,250
Advertising expense	$ 24,200
Income tax Expense	$ 15,150
Insurance Expense	$ 10,100
Supplies Expense	$ 66,400
Interest Expense	$ 10,100
Total Expense		$ 870,600
Net Income		$ 63,200

Expert Solution

To determine

Concept Introduction:

Income Statement:

Income Statement is the part of the financial statement which is prepared to calculate the net income earned by the organization. In the income statement, all expenses are subtracted from the revenues to calculate the net income. It is prepared for a particular period.

There are two ways to present and income statement: Single-step and Multi-step. In the, multi-step income statement the net income calculated after showing multiple steps. In this statement operating and items are separate from non operating items.

Requirement-2:

To Prepare:

The Net profit margin and effect on net income if sales revenue increases by $100,000.

Answer to Problem 46E

The Net profit margin is 6.77%. The Net income shall increase by $6,770 if sales revenue increases by $100,000.

Explanation of Solution

The Net profit margin is calculated as follows;

Net profit margin= Net profit / Sales = 63200/933800 =0.0677 = 6.77%

The Net income shall increase by 100000*6.77% = $6,770 if sales revenue increases by $100,000.

Expert Solution

To determine

Concept Introduction:

Income Statement:

Income Statement is the part of the financial statement which is prepared to calculate the net income earned by the organization. In the income statement, all expenses are subtracted from the revenues to calculate the net income. It is prepared for a particular period.

There are two ways to present and income statement: Single-step and Multi-step. In the, multi-step income statement the net income calculated after showing multiple steps. In this statement operating and items are separate from non operating items.

Requirement-3:

To Discuss:

The future profitability of the company.

Answer to Problem 46E

The profit of the company is declining and it may decline in future also.

Explanation of Solution

The Net profit margin is 6.77% in the year 2019 and it was 8.5% for 2018 it means the profit of the company is declining and it may decline in future also.

Answer 8

Expert Solution

To determine

Concept Introduction:

Income Statement:

Income Statement is the part of the financial statement which is prepared to calculate the net income earned by the organization. In the income statement, all expenses are subtracted from the revenues to calculate the net income. It is prepared for a particular period.

There are two ways to present and income statement: Single-step and Multi-step. In the, multi-step income statement the net income calculated after showing multiple steps. In this statement operating and items are separate from non operating items.

Requirement-1:

To Prepare:

The Single step income statement.

Answer to Problem 46E

The Single step income statement is as follows:

ERS Inc.
Single Step Income Statement
For the month of January 2019
Revenue:
Service revenue	$ 933,800
Total Revenue		$ 933,800
Expenses:
Cost of Goods Sold
Utilities Expense	$ 26,100
Wages Expense	$ 448,300
Salaries Expense	$ 195,600
Rent Expense	$ 58,400
Depreciation expense	$ 16,250
Advertising expense	$ 24,200
Income tax Expense	$ 15,150
Insurance Expense	$ 10,100
Supplies Expense	$ 66,400
Interest Expense	$ 10,100
Total Expense		$ 870,600
Net Income		$ 63,200

Explanation of Solution

There are two ways to present and income statement: Single-step and Multi-step. In the, multi-step income statement the net income calculated after showing multiple steps. In this statement operating and items are separate from non operating items.

The Single step income statement is prepared as follows:

ERS Inc.
Single Step Income Statement
For the month of January 2019
Revenue:
Service revenue	$ 933,800
Total Revenue		$ 933,800
Expenses:
Cost of Goods Sold
Utilities Expense	$ 26,100
Wages Expense	$ 448,300
Salaries Expense	$ 195,600
Rent Expense	$ 58,400
Depreciation expense	$ 16,250
Advertising expense	$ 24,200
Income tax Expense	$ 15,150
Insurance Expense	$ 10,100
Supplies Expense	$ 66,400
Interest Expense	$ 10,100
Total Expense		$ 870,600
Net Income		$ 63,200

Answer 9

Expert Solution

Answer 10

Expert Solution

Answer 11

Expert Solution

Answer 12

To determine

Concept Introduction:

Income Statement:

Income Statement is the part of the financial statement which is prepared to calculate the net income earned by the organization. In the income statement, all expenses are subtracted from the revenues to calculate the net income. It is prepared for a particular period.

There are two ways to present and income statement: Single-step and Multi-step. In the, multi-step income statement the net income calculated after showing multiple steps. In this statement operating and items are separate from non operating items.

Requirement-1:

To Prepare:

The Single step income statement.

Answer 13

Answer to Problem 46E

The Single step income statement is as follows:

ERS Inc.
Single Step Income Statement
For the month of January 2019
Revenue:
Service revenue	$ 933,800
Total Revenue		$ 933,800
Expenses:
Cost of Goods Sold
Utilities Expense	$ 26,100
Wages Expense	$ 448,300
Salaries Expense	$ 195,600
Rent Expense	$ 58,400
Depreciation expense	$ 16,250
Advertising expense	$ 24,200
Income tax Expense	$ 15,150
Insurance Expense	$ 10,100
Supplies Expense	$ 66,400
Interest Expense	$ 10,100
Total Expense		$ 870,600
Net Income		$ 63,200

Answer 14

Explanation of Solution

There are two ways to present and income statement: Single-step and Multi-step. In the, multi-step income statement the net income calculated after showing multiple steps. In this statement operating and items are separate from non operating items.

The Single step income statement is prepared as follows:

ERS Inc.
Single Step Income Statement
For the month of January 2019
Revenue:
Service revenue	$ 933,800
Total Revenue		$ 933,800
Expenses:
Cost of Goods Sold
Utilities Expense	$ 26,100
Wages Expense	$ 448,300
Salaries Expense	$ 195,600
Rent Expense	$ 58,400
Depreciation expense	$ 16,250
Advertising expense	$ 24,200
Income tax Expense	$ 15,150
Insurance Expense	$ 10,100
Supplies Expense	$ 66,400
Interest Expense	$ 10,100
Total Expense		$ 870,600
Net Income		$ 63,200

Answer 15

Expert Solution

To determine

Concept Introduction:

Income Statement:

Income Statement is the part of the financial statement which is prepared to calculate the net income earned by the organization. In the income statement, all expenses are subtracted from the revenues to calculate the net income. It is prepared for a particular period.

There are two ways to present and income statement: Single-step and Multi-step. In the, multi-step income statement the net income calculated after showing multiple steps. In this statement operating and items are separate from non operating items.

Requirement-2:

To Prepare:

The Net profit margin and effect on net income if sales revenue increases by $100,000.

Answer to Problem 46E

The Net profit margin is 6.77%. The Net income shall increase by $6,770 if sales revenue increases by $100,000.

Explanation of Solution

The Net profit margin is calculated as follows;

Net profit margin= Net profit / Sales = 63200/933800 =0.0677 = 6.77%

The Net income shall increase by 100000*6.77% = $6,770 if sales revenue increases by $100,000.

Answer 16

Expert Solution

Answer 17

Expert Solution

Answer 18

Expert Solution

Answer 19

To determine

Concept Introduction:

Income Statement:

Income Statement is the part of the financial statement which is prepared to calculate the net income earned by the organization. In the income statement, all expenses are subtracted from the revenues to calculate the net income. It is prepared for a particular period.

There are two ways to present and income statement: Single-step and Multi-step. In the, multi-step income statement the net income calculated after showing multiple steps. In this statement operating and items are separate from non operating items.

Requirement-2:

To Prepare:

The Net profit margin and effect on net income if sales revenue increases by $100,000.

Answer 20

Answer to Problem 46E

The Net profit margin is 6.77%. The Net income shall increase by $6,770 if sales revenue increases by $100,000.

Answer 21

Explanation of Solution

The Net profit margin is calculated as follows;

Net profit margin= Net profit / Sales = 63200/933800 =0.0677 = 6.77%

The Net income shall increase by 100000*6.77% = $6,770 if sales revenue increases by $100,000.

Answer 22

Expert Solution

To determine

Concept Introduction:

Income Statement:

Income Statement is the part of the financial statement which is prepared to calculate the net income earned by the organization. In the income statement, all expenses are subtracted from the revenues to calculate the net income. It is prepared for a particular period.

There are two ways to present and income statement: Single-step and Multi-step. In the, multi-step income statement the net income calculated after showing multiple steps. In this statement operating and items are separate from non operating items.

Requirement-3:

To Discuss:

The future profitability of the company.

Answer to Problem 46E

The profit of the company is declining and it may decline in future also.

Explanation of Solution

The Net profit margin is 6.77% in the year 2019 and it was 8.5% for 2018 it means the profit of the company is declining and it may decline in future also.

Answer 23

Expert Solution

Answer 24

Expert Solution

Answer 25

Expert Solution

Answer 26

To determine

Concept Introduction:

Income Statement:

Income Statement is the part of the financial statement which is prepared to calculate the net income earned by the organization. In the income statement, all expenses are subtracted from the revenues to calculate the net income. It is prepared for a particular period.

There are two ways to present and income statement: Single-step and Multi-step. In the, multi-step income statement the net income calculated after showing multiple steps. In this statement operating and items are separate from non operating items.

Requirement-3:

To Discuss:

The future profitability of the company.

Answer 27

Answer to Problem 46E

The profit of the company is declining and it may decline in future also.

Answer 28

Explanation of Solution

The Net profit margin is 6.77% in the year 2019 and it was 8.5% for 2018 it means the profit of the company is declining and it may decline in future also.

Answer 29

Ch. 1 - Define accounting. How does accounting differ from...Ch. 1 - Prob. 2DQ Ch. 1 - What is accounting entity?Ch. 1 - Prob. 4DQ Ch. 1 - Prob. 5DQ Ch. 1 - Prob. 6DQ Ch. 1 - Define the terms revenue and expense. How are...Ch. 1 - Name and briefly describe the purpose of the four...Ch. 1 - What types of questions are answered by the...Ch. 1 - Prob. 10DQ

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Answer to Problem 46E

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Answer to Problem 46E

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Answer to Problem 46E

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