Multiple-Step Income Statement
Shown Below Is a Recent Income Statement

question 76

Essay

Multiple-step income statement
Shown below is a recent income statement for Phaeton, Inc.:
$\begin{array} { c } \text {PHAETON LMMTE }\\ \text {Income Statement }\\ \text {For the Year Ended December 31,2010 }\\\begin{array}{|l|r|r|r|}\hline \text { Sales } & & & \$ 6,000,000 \\\hline \text { Cost and expenses: } & & & \\\hline \text { Cost of goods sold } & \$(4,200,000) & & \\\hline \text { Operating expenses } & (900,000) & & \\\hline \text { Interest expense } & (150,000) & & (\$ 5,250,000) \\\hline \text { Profit before income taxes } & & & \$ 750,000 \\\hline \text { Income taxes } & & & (360,000) \\\hline \text { Profit } & & & \$ 390,000\\\hline\end{array}\end{array}$ Prepare an income statement for the year in a multiple-step format. (Use the grid provided below.)
$\begin{array} { c } \text {PHAETON LMMTE }\\ \text {Income Statement }\\ \text {For the Year Ended December 31,2010 }\\\begin{array}{|l|r|r|r|}\hline \text { Sales } & & & \$ 6,000,000 \\\hline \text { }\\\hline \text { }\\\hline \text { }\\\hline \text { }\\\hline \text { }\\\hline \text { }\\\hline \text { }\\\hline\end{array}\end{array}$

Learn the economic reasoning behind government policies on markets and their intended and unintended consequences.

Understand the conceptual basis for recording equity transactions and the impact on a company's financial statements.

Identify and analyze the process of issuing common and preferred stock, including those with par value, no-par value, and stated value.

Calculate and record transactions related to the issuance of stock for cash, assets (other than cash), and services.

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Definitions:

Psychoanalysis

A method of psychological theory and therapy that aims to treat mental disorders by investigating the interaction of conscious and unconscious elements in the mind and bringing repressed fears and conflicts into the conscious mind by techniques such as dream interpretation and free association.

Individual Psychology

A psychological doctrine introduced by Alfred Adler, focusing on the uniqueness of each person and their drive to fulfill their potential.

Cognitive Approach

A psychological perspective that emphasizes internal mental processes such as perception, memory, and problem-solving as central to understanding behavior.

Personal Constructs

A theory focusing on how individuals perceive, interpret, and predict events in the world through personal mental models.