how to prepare income statement

other revenue

interest income (trial balance) net income b4 federal tax expense (income from operations plus other revenue) less federal income tax (trial balance) net income b4- less fed)

what goes under cost of merch sold?

merch inventory jan 1 purchases less purchases discount Purchases ret + allows Net purchases total cost of merch available for sale ( add net purchases and merch inventory) less merch inventory dec 31 2017 (trail balance) cost of merch sold (total merch - less merch) gross profit (total op. rev. -cost of merch sold)

what comes first?

operating revenue

what goes under operating revenue?

sales less sales dis. sales ret + allow (add less and sales) Net sales (subtract less and sales from sales)

Operating expenses

all the expense accts from trial balance total operating expenses income from operations (gross profit - total op. ex)

what comes afer operating revenue?

cost of merch sold