Question 2

The following is a partial Adjusted Trial Balance for Alpha Company for the month:

Alpha Company

Adjusted Trial Balance (partial)

January 31, 2016

Accounts

Debit

Credit

Inventory

$2,750

Sales

$12,500

Sales Discounts

200

Sales Returns & Allowances

1,200

Purchases

4,000

Purchases Discounts

150

Purchase Returns & Allowances

450

Freight In

50

Advertising Expense

150

Depreciation Expense

145

Freight Out

70

Income Tax Expense

500

Salaries Expense

500

Utilities Expense

100

Additionally, Inventory for December 31, 2015 was $2,700. Prepare a multiple-step income statement. Prepare a partial multiple-step income statement that includes the Sales, Cost of Goods Sold sections & gross profit.

Alpha Company

Income Statement (partial)