Reference no: EM132517962

ABC Inc. is facing problems in the adjustment of Irregular items of Income Statement and Retained earnings statement. Because such adjustments need special knowledge of International Accounting Standards so they have hired your accounting firm for helping them to prepare financial statements.

You have been handed over the following information,

1. Selling Expense $ 200,000
2. Admin Expenses $100,000
3. Write-Off of Account Receivable $80,000
4. Income Tax 20%
5. Gain on sale of Trading Securities $ 110,000
6. Interest Earned $ 145,000
7. Retained Earnings beginning balance $ 760,000
8. Sales (Gross) $ 2,300,000
9. Dividend Declared and Paid $ 30,000
10. Sales Return $ 20,000
11. Cost of Goods Sold $ 800,000
12. Sales Discount $ 34,000
13. Depreciation Expense (current year) $ 24,000
14. Rent Expense $ 40,000
15. Advertisement Expense $ 60,000
16. Interest Expense $ 61,000
17. Loss due to Hail Storm - Extraordinary Item (Pre Tax) $ 465,000
18. Loss from Discontinuation of a business unit (Pre Tax) $ 120,000
19. Loss from the operations of Discontinued business unit (Pre Tax) $ 23,000
20. Under statement of Depreciation Expense related to previous year (Pre Tax) $ 25,000
21. Gain from Extraordinary Item (Pre Tax) $ 600,000
22. Gain to change in inventory method (Pre Tax) $ 38,000
23. Write-Off of inventory due to obsolesce $ 78,000

Requirement: Assuming current year as 2019, you are required to prepare the,

Question 1. Prepare multiple step income Statement for the year 2019

Question 2. Prepare Statement of Retained Earnings with adjustment of irregular items.

Question 3. Differentiate between a condense and multiple step income statement