P4-4.
(Multiple- and Single-Step Income, Retained Earnings) - Latosha
The following account balances were included in the trial balance of Twain Corporation at June 30, 2014.
Sales revenue
$1,578,500
Depreciation expense (office furniture and equipment)
$ 7,250
Sales discounts
31,150
Cost of goods sold
896,770
Property tax expense
7,320
Salaries and wages expense (sales)
56,260
Bad debt expense (selling)
4,850
Sales commissions
97,600
Maintenance and repairs expense (administration)
9,130
Travel expense (salespersons)
28,930
Delivery expense
21,400
Office expense
6,000
Entertainment expense
14,820
Sales returns and allowances
62,300
Telephone and Internet expense (sales)
9,030
Dividends received
38,000
Depreciation expense (sales equipment)
4,980
Interest expense
18,000
Maintenance and repairs expense (sales)
6,200
Income tax expense
102,000
Miscellaneous selling expenses
4,715
Depreciation understatement due to error--2011 (net of tax)
17,700
Office supplies used
3,450
Telephone and Internet expense (administration)
2,820
Dividends declared on preferred stock
9,000
Dividends declared on common stock
37,000
The Retained Earnings account had a balance of $337,000 at July 1, 2013. There are 80,000 shares of common stock outstanding.
Instructions
(a)
Using the multiple-step form, prepare an income statement and a retained earnings statement for the year ended June 30, 2014.
(b)
Using the single-step form, prepare an income statement and a retained earnings statement for the year ended June 30, 2014.
Answer will be sent by email as attachment.
