Reference no: EM132739773

Question - The following amounts appeared on Plymouth Electronics' adjusted trial balance as of December 31, 2020.

Debit Credit

Merchandise inventory $18,700

Other assets 479,785

Liabilities $304,370

Celine Plymouth, capital 242,765

Celine Plymouth, withdrawals 66,200

Sales 934,000

Sales discounts 13,780

Sales returns and allowances 4,915

Interest income 640

Cost of goods sold 715,000

Sales salaries expense 78,400

Office salaries expense 55,700

Rent expense, selling space 32,200

Rent expense, office space 2,200

Store supplies expense 1,540

Office supplies expense 695

Depreciation expense, store equipment 8,110

Depreciation expense, office equipment 1,960

Insurance expense 2,590

Totals $1,481,775 $1,481,775

Required -

1. Prepare 2020 classified multiple-step income statement for Plymouth Electronics.

2. Prepare single-step income statement.

Analysis Component: Calculate the gross profit ratio for the year ended December 31, 2020, and compare it to the prior year, commenting on whether the change was favourable or unfavourable. The gross profit ratio for Plymouth Electronics' year ended December 31, 2019, was 32%.