Ashril Company gathered the following condensed data for the year ended 31 December 2020:

(RM) (RM)

Cost of goods sold 670,000 Interest expense 25,000 Net sales 2,100,000 Dividend revenue 60,000 Casualty loss from vandalism 95,000 Operating expense 55,000

Required:

(a) Prepare a multiple-step income statement for the year ended 31 December 2020. (8 marks)

(b) A merchandiser frequently has a need to use contra accounts related to the sale of goods:

i. Classify the contra accounts that have normal debit balances. (1 marks) ii. Illustrate why they are not considered expenses. (1 marks)