Question

Income statement information for adidas Group, a German footwear, apparel, and accessories manufacturer, for the year ended December 31, 2014, follows. The company applies IFRS and reports its results in millions of euros. Prepare its calendar-year 2014 (1) multiple-step income statement and (2) single-step income statement.

Net income	€564
Financial income	19
Financial expenses	67
Operating profit	883
Cost of sales	7,610
Income tax	271
Income before taxes	835
Gross profit	6,924
Royalty and commission income	102
Other operating income	138
Other operating expenses	6,281
Net sales	14,534

Short answer

Single-step income statementcategorizes items like revenue and expenses only, while multiple-step income statementcategorizes revenue and expenses made on the basis of whether they are operating or non-operating.

Step-by-step solution

Definition of Income Statement

A statement prepared by an accountant that represents the net benefits generated by a business entity by reporting the expenses and revenue is known as an income statement.

Single-step income statement

Particular	Amount
Net Sales	€14,534
Add: Other operating income	138
Add: Royalty and commission income	102
Add: Financial income	19
Less: Financial expenses	(67)
Less: Cost of sales	(7,610)
Less: Income tax	(271)
Less: Other operating expenses	(6,281)
Net income	€564

Multi-step income statement

Particular	Amount
Net Sales	€14,534
Less: Cost of sales	(7,610)
Gross profit	6,924
Add: Other operating income	138
Add: Royalty and commission income	102
Less: Other operating expenses	(6,281)
Operating income	883
Add: Financial income	19
Less: Financial expenses	(67)
Income before taxes	835
Less: Income tax	(271)
Net income	€564