1. Explain the "due process procedures followed by the FASB in developing a financial reporting standard. (3 Marks) Question No. 3: (LO3) (22 Marks) ABC In ADJUSTED TRIAL BALANCE December 2019 1.581.535 Not Recivable In Term 1:45.35 IS 5111 Accumbedryf Sales Dons Sales Perfect 11.125 2535 315 31 AR Resined Fang Notes Payable Cm Stock 515 per The Tale Cash Dividers Declared ARD Sken 123.750 401 TOO 10.725 Short te 2410 H Corrector Stundentafely) Other Orch 188.100 107.350 561 Per landed As Expert Mercy 214 11 41.250 21.450 Drakendom Lower Sakodvest aree ATH Beats Payable Banc Sale of Land Accumbed Depectie-aktig Ambat Themmaris Int 11 30,35 The company uses the periodic inventory system. A physical count of inventory on December 31 resulted in an inventory amount of $20,000. The company outstanding 20000 shares with shareholders. Instructions Prepare an income statement for the year ending December 31, 2019 using the Multi- step form. Assume that twenty thousand shares of common stock were outstanding the entire year. (10 Marks) (b) Prepare a retained earnings statement for the year ending December 31, 2019. (5 Marks) (c) Prepare Single-Step Income Statement (Show all working on a separate page). (7 Marks) Solution 1. Explain the "due process procedures followed by the FASB in developing a financial reporting standard. (3 Marks) Question No. 3: (LO3) (22 Marks) ABC In ADJUSTED TRIAL BALANCE December 2019 1.581.535 Not Recivable In Term 1:45.35 IS 5111 Accumbedryf Sales Dons Sales Perfect 11.125 2535 315 31 AR Resined Fang Notes Payable Cm Stock 515 per The Tale Cash Dividers Declared ARD Sken 123.750 401 TOO 10.725 Short te 2410 H Corrector Stundentafely) Other Orch 188.100 107.350 561 Per landed As Expert Mercy 214 11 41.250 21.450 Drakendom Lower Sakodvest aree ATH Beats Payable Banc Sale of Land Accumbed Depectie-aktig Ambat Themmaris Int 11 30,35 The company uses the periodic inventory system. A physical count of inventory on December 31 resulted in an inventory amount of $20,000. The company outstanding 20000 shares with shareholders. Instructions Prepare an income statement for the year ending December 31, 2019 using the Multi- step form. Assume that twenty thousand shares of common stock were outstanding the entire year. (10 Marks) (b) Prepare a retained earnings statement for the year ending December 31, 2019. (5 Marks) (c) Prepare Single-Step Income Statement (Show all working on a separate page). (7 Marks) Solution