Instructions Accounts, Labels and Amount Descriptions Select information below is taken from the December 31, 2020 adjusted trial balance of Accounts Rummer Company: Freight-in Freight-in $7,500 General and administrative expenses General and administrative expenses 50,000 Inventory, 1/1/20 Interest expense 15,000 Inventory, 12/31/20 Inventory 165,000 Interest expense Loss on sale of a major component of the business (pretax) 15,000 Income tax expense Purchases 330,000 Loss on sale of business component Purchases returns 5,000 Purchases Sales 700,000 Purchases returns Sales discounts 10,000 Sales Selling expenses 25,000 Sales discounts Selling expenses The inventory on January 1 was $140,000. The income tax rate is 30%. There were 25,000 Labels shares of common stock outstanding throughout the year. Expenses Operating expenses Required: Other items a. Prepare a schedule of the cost of goods sold. Amount Descriptions b. Prepare a 2020 income statement for Rummer Company, using a multiple-step Cost of purchases format (disregard earnings per share). Cost of goods available for sale c. Prepare a 2020 income statement for Rummer Company, using a single-step Cost of goods sold format (disregard earnings per share). Gross profit
Instructions Accounts, Labels and Amount Descriptions Select information below is taken from the December 31, 2020 adjusted trial balance of Accounts Rummer Company: Freight-in Freight-in $7,500 General and administrative expenses General and administrative expenses 50,000 Inventory, 1/1/20 Interest expense 15,000 Inventory, 12/31/20 Inventory 165,000 Interest expense Loss on sale of a major component of the business (pretax) 15,000 Income tax expense Purchases 330,000 Loss on sale of business component Purchases returns 5,000 Purchases Sales 700,000 Purchases returns Sales discounts 10,000 Sales Selling expenses 25,000 Sales discounts Selling expenses The inventory on January 1 was $140,000. The income tax rate is 30%. There were 25,000 Labels shares of common stock outstanding throughout the year. Expenses Operating expenses Required: Other items a. Prepare a schedule of the cost of goods sold. Amount Descriptions b. Prepare a 2020 income statement for Rummer Company, using a multiple-step Cost of purchases format (disregard earnings per share). Cost of goods available for sale c. Prepare a 2020 income statement for Rummer Company, using a single-step Cost of goods sold format (disregard earnings per share). Gross profit
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Instructions
Accounts, Labels and Amount Descriptions
Select information below is taken from the December 31, 2020 adjusted trial balance of
Accounts
Rummer Company:
Freight-in
Freight-in
$7,500
General and administrative expenses
General and administrative expenses
50,000
Inventory, 1/1/20
Interest expense
15,000
Inventory, 12/31/20
Inventory
165,000
Interest expense
Loss on sale of a major component of the business (pretax)
15,000
Income tax expense
Purchases
330,000
Loss on sale of business component
Purchases returns
5,000
Purchases
Sales
700,000
Purchases returns
Sales discounts
10,000
Sales
Selling expenses
25,000
Sales discounts
Selling expenses
The inventory on January 1 was $140,000. The income tax rate is 30%. There were 25,000
Labels
shares of common stock outstanding throughout the year.
Expenses
Operating expenses
Required:
Other items
a. Prepare a schedule of the cost of goods sold.
Amount Descriptions
b. Prepare a 2020 income statement for Rummer Company, using a multiple-step
Cost of purchases
format (disregard earnings per share).
Cost of goods available for sale
c. Prepare a 2020 income statement for Rummer Company, using a single-step
Cost of goods sold
format (disregard earnings per share).
Gross profit
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