Reference no: EM132787160
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.
Problem 1: 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.