Prepare a Multiple-Step Income Statement Using the Following Data for Bella

question 145

Essay

Prepare a multiple-step income statement using the following data for Bella Inc for the year ended December 31, 2021.
$\begin{array}{l|r}\text { Sales revenue } & \$ 300,000 \\\hline \text { Rental revenue } & 35,000 \\\hline \text { Loss on sale of short-term investments } & 19,000 \\\hline \text { Distribution expense } & 23,000 \\\hline \text { Cost of goods sold } & 150,000 \\\hline \text { General and administrative expense } & 25,000 \\\hline \text { Depreciation expense } & 20,000 \\\hline \text { Interest income } & 5,000 \\\hline \text { Income taxexpense ( } 25 \% \text { rate on all items) } &\end{array}$

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Definitions:

Cost Allocated

The portion of expenses assigned to a specific product, service, or department within a company, as part of cost accounting practices.

Assembly Department

An Assembly Department is a section within a manufacturing facility where components are assembled into final products.

Absorption Costing

An accounting method that includes all manufacturing costs - direct materials, direct labor, and both variable and fixed overhead - in the cost of a product.

Variable Costing

An accounting method that includes only variable production costs (materials, labor, and overhead) in product costs and treats fixed costs as period expenses.