Question
Company XYZ had the following information during 2020: 1. Beginning inventory was $50,000. Purchases of inventory was $20,000. Ending inventory was 35% of beginning inventory
Company XYZ had the following information during 2020:
1. Beginning inventory was $50,000. Purchases of inventory was $20,000. Ending inventory was 35% of beginning inventory at the end of the year.
2. Cash on hand was $325,000.
3. Sales revenue was $225,000.
4. Operating expenses were half of cost of goods sold.
5. Income tax rate was 20%.
Prepare an income statement for 2020 using the (1) single-step approach and (2) multiple-step approach. What are the advantages and disadvantages of each?
Step by Step Solution
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Step: 1
Single step approach I ncome statement for 2020 of xyz ltd Particulars Amount Amount revenues and gains Sales revenue 225000 Less Expenses and losses cost of goods sold working note 152500 Operating e...
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Managerial Accounting A Focus on Ethical Decision Making
Authors: Steve Jackson, Roby Sawyers, Greg Jenkins
5th edition
324663854, 978-0324663853
