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Eva Corporation reported the following amounts for the year ended 31 December 2020: Inventory at 1 January 2020 Inventory at 31 December 2020 $189,000 284,250 2,100,000 Sales Sales discounts 45,000 780,000 Purchases Loss on sale of investment 13,500 Purchase returns and allowances 16,500 Sales returns and allowances 41,250 Transportation-in Interest expenses Selling expenses Administrative expenses Loss from operations of a discontinued division Gain on disposal of a discontinued division Loss on disposal of part of the retail division 28,530 9,000 241,650 193,320 225,000 170,000 7,500 180,000 1,485,000 Rent revenue Retained earnings at 1 January 2020 Additional information: (1) Depreciation on a delivery van had not been recorded for years 2019 and 2020 as at 31 December 2020. The van was purchased on 1 July 2019 at a cost of $200,000. The residual value and useful life were estimated to be $10,000 and 5 years respectively. Double-declining balance method is to be used for the computation of depreciation on this van. (2) The income tax rate applicable for year 2020 was 30%. (3) Eva Corporation changed its method of accounting for inventory from the first-in first-out method to the average cost method. Inventory in 2020 was correctly recorded using the average cost method. The new inventory method would have resulted in an additional $125,000 of cost of goods sold (before taxes) being reported on prior years' income statement. (4) 100,000 shares of ordinary shares were outstanding during the year and $45,000 preference dividend was declared for 2020

Eva Corporation reported the following amounts for the year ended 31 December 2020: Inventory at 1 January 2020 Inventory at 31 December 2020 $189,000 284,250 2,100,000 Sales Sales discounts 45,000 780,000 Purchases Loss on sale of investment 13,500 Purchase returns and allowances 16,500 Sales returns and allowances 41,250 Transportation-in Interest expenses Selling expenses Administrative expenses Loss from operations of a discontinued division Gain on disposal of a discontinued division Loss on disposal of part of the retail division 28,530 9,000 241,650 193,320 225,000 170,000 7,500 180,000 1,485,000 Rent revenue Retained earnings at 1 January 2020 Additional information: (1) Depreciation on a delivery van had not been recorded for years 2019 and 2020 as at 31 December 2020. The van was purchased on 1 July 2019 at a cost of $200,000. The residual value and useful life were estimated to be $10,000 and 5 years respectively. Double-declining balance method is to be used for the computation of depreciation on this van. (2) The income tax rate applicable for year 2020 was 30%. (3) Eva Corporation changed its method of accounting for inventory from the first-in first-out method to the average cost method. Inventory in 2020 was correctly recorded using the average cost method. The new inventory method would have resulted in an additional $125,000 of cost of goods sold (before taxes) being reported on prior years' income statement. (4) 100,000 shares of ordinary shares were outstanding during the year and $45,000 preference dividend was declared for 2020

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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文字 Required: (a) Prepare an income statement for the year ended 31 December 2020. (b) Prepare a retained earnings statement for the year ended 31 December 2020.
Transcribed Image Text:文字 Required: (a) Prepare an income statement for the year ended 31 December 2020. (b) Prepare a retained earnings statement for the year ended 31 December 2020.
Eva Corporation reported the following amounts for the year ended 31 December 2020: Inventory at 1 January 2020 Inventory at 31 December 2020 $189,000 284,250 2,100,000 45,000 Sales Sales discounts Purchases 780,000 13,500 16,500 Loss on sale of investment Purchase returns and allowances Sales returns and allowances 41,250 Transportation-in Interest expenses 28,530 9,000 Selling expenses Administrative expenses 241,650 193,320 Loss from operations of a discontinued division Gain on disposal of a discontinued division Loss on disposal of part of the retail division 225,000 170,000 7,500 180,000 1,485,000 Rent revenue Retained earnings at 1 January 2020 Additional information: (1) Depreciation on a delivery van had not been recorded for years 2019 and 2020 as at 31 December 2020. The van was purchased on 1 July 2019 at a cost of $200,000. The residual value and useful life were estimated to be $10,000 and 5 years respectively. Double-declining balance method is to be used for the computation of depreciation on this van. (2) The income tax rate applicable for year 2020 was 30%. (3) Eva Corporation changed its method of accounting for inventory from the first-in first-out method to the average cost method. Inventory in 2020 was correctly recorded using the average cost method. The new inventory method would have resulted in an additional $125,000 of cost of goods sold (before taxes) being reported on prior years' income statement. (4) 100,000 shares of ordinary shares were outstanding during the year and $45,000 preference dividend was declared for 2020
Transcribed Image Text:Eva Corporation reported the following amounts for the year ended 31 December 2020: Inventory at 1 January 2020 Inventory at 31 December 2020 $189,000 284,250 2,100,000 45,000 Sales Sales discounts Purchases 780,000 13,500 16,500 Loss on sale of investment Purchase returns and allowances Sales returns and allowances 41,250 Transportation-in Interest expenses 28,530 9,000 Selling expenses Administrative expenses 241,650 193,320 Loss from operations of a discontinued division Gain on disposal of a discontinued division Loss on disposal of part of the retail division 225,000 170,000 7,500 180,000 1,485,000 Rent revenue Retained earnings at 1 January 2020 Additional information: (1) Depreciation on a delivery van had not been recorded for years 2019 and 2020 as at 31 December 2020. The van was purchased on 1 July 2019 at a cost of $200,000. The residual value and useful life were estimated to be $10,000 and 5 years respectively. Double-declining balance method is to be used for the computation of depreciation on this van. (2) The income tax rate applicable for year 2020 was 30%. (3) Eva Corporation changed its method of accounting for inventory from the first-in first-out method to the average cost method. Inventory in 2020 was correctly recorded using the average cost method. The new inventory method would have resulted in an additional $125,000 of cost of goods sold (before taxes) being reported on prior years' income statement. (4) 100,000 shares of ordinary shares were outstanding during the year and $45,000 preference dividend was declared for 2020
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