Cost of Goods Sold and Income Statement Schuch Company presents you with the following account balances taken from its December 31 adjusted trial balance: Inventory, January 1 $45,000 Purchases returns $3,500 Selling expenses 35,000 Interest expense 4,000 Purchases 120,000 Sales discounts taken 2,000 Sales General and administrative expenses 260,000 22,000 Gain on sale of property (pretax) Freight-in 7,000 5,000 Additional data: 1. A physical count reveals an ending-inventory of $22,500 on December 31. 2. Twenty-five thousand shares of common stock have been outstanding the entire year. 3. The income tax rate is 30% on all items of income. Required: 1. Prepare a separate schedule for Schuch's cost of goods sold. SCHUCH COMPANY Schedule 1: Cost of Goods Sold For Year Ended December 31, Current Year 45,000 Inventory, 1/1 Purchases $ 120,000 Freight-in 5,000 Cost of purchases $ 125,000 Less: Purchases returns 3,500 121,500 166,500 22,500 Net purchases Cost of goods available for sale Less: Inventory, 12/31 Cost of goods sold 144,000 2. Prepare a multiple-step income statement. Round earnings per share computations to two decimal places. SCHUCH COMPANY Income Statement (Multi-Step) For Year Ended December 31, Current Year Sales Less: Sales discounts taken Net sales Cost of goods sold Gross profit Operating expenses: Selling expenses 35,000 General and administrativo ovnancar 22.000 260,000 2,000 258,000 144,000 114,000 Less: Sales discounts taken Net sales Cost of goods sold Gross profit Operating expenses: Selling expenses 35,000 General and administrative expenses 22,000 Total operating expenses Operating income Other items: Gain on sale of property 7,000 Interest expense 4,000 Income before income tax Income tax expense Net income Components of Income Net income 2,000 258,000 144,000 114,000 EPS 3. Prepare a single-step income statement. Round earnings per share computations to two decimal places. Revenues: SCHUCH COMPANY Income Statement (Single-Step) For Year Ended December 31, Current Year Sales (net of discounts) Gain on sale of property Total revenues Expenses: Cost of goods sold Selling expenses General and administrative expenses Interest expense Income tax expense Total expenses Net income Components of Income EPS Net income