The following is a partial list of the accounts for Boot Company for the year ended December 31, 2020, in alphabetical order: 

During the year, the company issued shares for proceeds of $400,000. In addition, the company had a change in depreciation policy that required a retroactive adjustment that increased the prior year’s depreciation expense by $62,000. Boot pays income tax at the rate of 40%. Assume that all of the above items except for retained earnings are before tax. 

Required:

Using the information above, prepare, in good form, the following:

a. A multi-step income statement that includes relevant subtotals, with operating expenses listed by their function, for the year ended December 31, 2020.

b. A statement of changes in equity for the year ended December 31, 2020.

Transcribed Image Text:

Common shares Cost of goods sold Depreciation expense Dividends declared Employee wages and benefits Loss from discontinued operations before tax Marketing and advertising expenses Retained earnings, January 1, 2020 Sales Utilities expense Dr. (Cr.) $(2,000,000) 3,775,000 84,000 150,000 957,000 107,000 642,000 (443,000) (4,661,000) 315,000