Question

Question:

Here are the account balances for Reid Corporations June 30, 2020. I am having trouble with preparing the single step income statement

Sales revenue

$1,835,050

Telephone and Internet expense

Cost of goods sold

1,071,770

 (office)

$ 2,820

Salaries and wages expense (sales)

56,260

Salaries and wages (office)

7,320

Sales commission expense

97,600

Supplies expense (sales)

4,850

Advertising expense (sales)

28,930

Repairs and maintenance expense (office)

9,130

Freight out

21,400

Depreciation understatement due to

Entertainment expense (sales)

14,820

Error—2018 (net of tax of $3,300) - adjust beginning retained earnings

17,700

Telephone and Internet expense (sales)

9,030

Miscellaneous expense (office)

6,000

Depreciation of sales equipment

4,980

Dividend revenue

38,000

Repairs and maintenance expense

Interest expense

18,000

 (sales)

6,200

Income tax expense

133,000

Miscellaneous expenses (sales)

4,715

Dividends declared on preferred shares

9,000

Supplies expense (office)

3,450

 

Depreciation expense on office furniture and equipment

7,250

Dividends declared on common shares

32,000

Assume Reid has elected to adopt IFRS.

Retained Earnings account had a balance of $292,000 at July 1, 2019.

Help with preparing an income statement for the year ended June 30, 2020, using the single-step format

During 2020, Reid incurred production salary and wage costs of $710,000 and consumed raw materials and other production supplies of $361,770

Answer 1

Prepare the single step income statement as follows:

A single step income statement uses two sections i.e., revenues and expenses as shown below  

R Corp
Income Statement
For the Year Ended June, 2020
Revenues:
Sales revenues	$1,835,050
Dividend revenue	$38,000
Total revenues		$1,873,050
Expenses:
Cost of goods sold	$1,071,770
Sales commission expense	$97,600
Salaries and wages expense (sales)	$56,260
Advertising expense (sales)	$28,930
Freight out	$21,400
Entertainment expense (sales)	$14,820
Telephone and Internet expense (sales)	$9,030
Repairs and maintenance expense (sales)	$6,200
Depreciation of sales equipment	$4,980
Supplies expense (sales)	$4,850
Miscellaneous expenses (sales)	$4,715
Repairs and maintenance expense (office)	$9,130
Salaries and wages expense (Office)	$7,320
Depreciation expense on office furniture and equipment	$7,250
Miscellaneous expense (office)	$6,000
Supplies expense (office)	$3,450
Telephone and internet expense (Office)	$2,820
Interest expense	$18,000
Income tax expense	$133,000
Total expenses		$1,507,525
Net income		$365,525

Please note that the other item balances are not relevant for preparing income statement.