The following account balances were included in the trial balance of Twain Corporation at June 30, 2020. Sales revenue $1,578,500 Depreciation expense (office Sales discounts 31,150 furniture and equipment) $ 7,250 Cost of goods sold 896,770 Property tax expense 7,320 Salaries and wages expense (sales) 56,260 Bad debt expense (selling) 4,850 Sales commissions 97,600 Maintenance and repairs Travel expense (salespersons) 28,930 expense (administration) 9,130 Delivery expense 21,400 Office expense 6,000 Entertainment expense 14,820 Sales returns and allowances 62,300 Telephone and Internet expense (sales) 9,030 Dividends received 38,000 Depreciation expense (sales equipment) 4,980 Interest expense 18,000 Maintenance and repairs expense (sales) 6,200 Income tax expense 102,000 Miscellaneous selling expenses 4,715 Depreciation understatement Office supplies used 3,450 due to error—2017 (net of tax) 17,700 Telephone and Internet expense (administration) 2,820 Dividends declared on preferred stock 9,000 Dividends declared on common stock 37,000 The Retained Earnings account had a balance of $337,000 at July 1, 2019. There are 80,000 shares of common stock outstanding. Instructions a. Using the multiple-step form, prepare an income statement and a retained earnings statement for the year ended June 30, 2020. b. Using the single-step form, prepare an income statement and a retained earnings statement for the year ended June 30, 2020.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The following account balances were included in the trial balance of Twain Corporation at June 30, 2020.

Sales revenue	$1,578,500	Depreciation expense (office
Sales discounts	31,150	furniture and equipment)	$ 7,250
Cost of goods sold	896,770	Property tax expense	7,320
Salaries and wages expense (sales)	56,260	Bad debt expense (selling)	4,850
Sales commissions	97,600	Maintenance and repairs
Travel expense (salespersons)	28,930	expense (administration)	9,130
Delivery expense	21,400	Office expense	6,000
Entertainment expense	14,820	Sales returns and allowances	62,300
Telephone and Internet expense (sales)	9,030	Dividends received	38,000
Depreciation expense (sales equipment)	4,980	Interest expense	18,000
Maintenance and repairs expense (sales)	6,200	Income tax expense	102,000
Miscellaneous selling expenses	4,715	Depreciation understatement
Office supplies used	3,450	due to error—2017 (net of tax)	17,700
Telephone and Internet expense (administration)	2,820	Dividends declared on preferred stock	9,000
		Dividends declared on common stock	37,000

The Retained Earnings account had a balance of $337,000 at July 1, 2019. There are 80,000 shares of common stock outstanding.

Instructions

a. Using the multiple-step form, prepare an income statement and a retained earnings statement for the year ended June 30, 2020.

b. Using the single-step form, prepare an income statement and a retained earnings statement for the year ended June 30, 2020.

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