Schuch Company presents you with the following account balances taken from its December 31 adjusted trial balance:Inventory, January 1$43,000 Purchases returns$3,500Selling expenses35,000 Interest expense4,000Purchases100,000 Sales discounts taken2,000Sales250,000 Gain on sale of property (pretax)7,000General and administrative expenses22,000 Freight-in5,000Additional data:A physical count reveals an ending-inventory of $22,500 on December 31.Twenty-five thousand shares of common stock have been outstanding the entire year.The income tax rate is 30% on all items of income.Required:Prepare a separate schedule for Schuch's cost of goods sold.Prepare a multiple-step income statement. Round earnings per share computations to two decimal places.Prepare a single-step income statement. Round earnings per share computations to two decimal places.

The question is based on the concept of Cost Accounting.

Answered: Schuch Company presents you with the…

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Schuch Company presents you with the following account balances taken from its December 31 adjusted trial balance:

Inventory, January 1	$43,000	Purchases returns	$3,500
Selling expenses	35,000	Interest expense	4,000
Purchases	100,000	Sales discounts taken	2,000
Sales	250,000	Gain on sale of property (pretax)	7,000
General and administrative expenses	22,000	Freight-in	5,000

Additional data:

A physical count reveals an ending-inventory of $22,500 on December 31.
Twenty-five thousand shares of common stock have been outstanding the entire year.
The income tax rate is 30% on all items of income.

Required:

Prepare a separate schedule for Schuch's cost of goods sold.

Prepare a multiple-step income statement. Round earnings per share computations to two decimal places.

Prepare a single-step income statement. Round earnings per share computations to two decimal places.

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