Reference no: EM132820834

Question - The following are selected ledger accounts of Ayayai Rose Corporation at December 31, 2020:

Cash $186,000

Entertainment expense $66,000

Inventory (as of Jan. 1, 2020) $533,000

Office expense $32,000

Sales revenue $4,333,000

Insurance expense $24,000

Unearned revenue $110,000

Advertising expense $54,000

Purchases $2,781,000

Freight out $91,000

Sales discounts $34,000

Depreciation expense of office equipment $52,000

Purchase discounts $27,000

Depreciation expense of sales equipment $36,000

Salaries and wages expense (sales) $287,000

Telephone and Internet expense (sales) $17,000

Salaries and wages expense (administrative) $342,000

Utilities expense (administrative) $32,000

Purchase returns and allowances $12,000

Miscellaneous expense $6,000

Sales returns and allowances $81,000

Rental revenue $230,000

Freight in $74,000

Loss on disposal of equipment $75,000

Accounts receivable $144,000

Interest expense $158,000

Sales commission expense $86,000

Common shares $1,000,000

Ayayai's Rose effective tax rate on all items is 40%. A physical inventory indicates that the ending inventory is $684,000. The number of common shares outstanding is 100,000.

Prepare condensed multi-step 2020 income statement for Ayayai Rose Corporation, showing expenses by function. Ayayai Rose follows ASPE but decides to disclose EPS on its income statement.