The following are selected ledger accounts of Holland Rose Corporation at December 31, 2020:

Holland Rose?s effective tax rate on all items is 25%. A physical inventory shows that the ending inventory is $686,000. The number of common shares outstanding is 90,000.

Instructions

Prepare a multiple-step 2020 income statement for Holland Rose Corporation, showing expenses by function. Holland Rose follows ASPE but decides to disclose EPS on its income statement.

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$ 185,000 $ 69,000 Cash Entertainment expense Office expense Insurance expense Advertising expense Freight out Depreciation expense of office equipment Depreciation expense of sales equipment Inventory (as at Jan. 1, 2020) Sales revenue 535,000 33,000 4,275,000 24,000 Unearned revenue 117,000 54,000 93,000 Purchases 2,786,000 Sales discounts 34,000 Purchase discounts 48,000 27,000 Salaries and wages expense (sales) 284,000 36,000 Salaries and wages expense (administrative) Purchase returns and allowances Telephone and Internet expense $346,000 (sales) $17,000 32,000 Utilities expense (administrative) Miscellaneous expense 15,000 Sales returns and allowances 79,000 8,000 Freight in Accounts receivable Rental revenue 72,000 240,000 Loss on disposal of equipment Interest expense Common shares 142,500 83,000 70,000 176,000 Sales commission expense 900,000