Simple Income Statement The following are selected account balances of the Albertson Company as of December 31, 2007:
|
Purchases (net) |
$63,000 |
Sales (net) |
$100,000 |
|
Merchandise inventory, January 1, 2007 |
20,000 |
Operating expenses |
22,000 |
|
Gain on sale of equipment |
5,000 |
Extraordinary loss (pretax) |
8,000 |
The merchandise inventory on December 31, 2007 is $31,000. Ten thousand shares of common stock have been outstanding the entire year. The company uses a periodic inventory system.
Required
Assuming a 30% income tax rate on all items of income, prepare a 2007 income statement for Albertson Company using (1) a multiple step format, and (2) a single step format.