Cost of Goods Sold and Income Statement The Fanta Company presents you with the following account balances taken from its December 31, 2007 adjusted trial balance:
|
Inventory, January 1, 2007 |
$43,000 |
|
Selling expenses |
35,000 |
|
Extraordinary gain (pretax) |
23,000 |
|
Purchases |
100,000 |
|
Sales |
250,000 |
|
General and administrative expenses |
22,000 |
|
Purchases returns |
$3,500 |
|
Interest expense |
4,000 |
|
Sales discounts taken |
2,000 |
|
Gain on sale of property (pretax) |
7,000 |
|
Freight in |
5,000 |
Additional data:
1. A physical count reveals an ending inventory of $22,500 on December 31, 2007.
2. Twenty five thousand shares of common stock have been outstanding the entire year.
3. The income tax rate is 30% on all items of income.
Required
1. As a supporting document for Requirements 2 and 3, prepare a separate schedule for Fanta Company’s cost of goods sold.
2. Prepare a 2007 multiple step income statement.
3. Prepare a 2007 single step income statement.