Intermediate accounting 1

Multistep Income Statement

The schedule of accounts of Thompson Corporation at December 31, 2020, is given in the spreadsheet. A physical count of inventory on December 31 resulted in an inventory amount of $64,000; thus, cost of goods sold for 2020 is $645,000. You are asked to prepare a multistep income statement.

Reference the appropriate cells in the schedule of accounts whenever possible in the income statement.

Complete the Sales section of the income statement.

1. Select the correct accounts using the drop-down lists in column H and enter the correct values in column J and K.
2. Using a formula calculate the Net sales in cell K14.

Complete the Selling Expenses section of the income statement.

1. Select the correct accounts using the drop-down lists in column H and enter the correct values in column I.
2. Notice that the total expenses for this section are already calculated in cell J24.

Complete the Administrative Expenses section of the income statement.

1. Select the correct accounts using the drop-down lists in column H and enter the correct values in column I.
2. Notice that the total expenses for this section are already calculated in cell J30.

Complete the Other revenues and gains section of the income statement.

1. Select the correct accounts using the drop-down lists in column H and enter the correct values in column J.
2. Notice that the total expenses for this section are already calculated in cell K37.

Complete the Other expenses and losses section of the income statement.

1. Select the correct accounts using the drop-down lists in column H and enter the correct values in column J.
2. Notice that the total expenses for this section are already calculated in cell K42.

Drop down menu:

Accounts payable

Accounts receivable

Accumulated depreciation-buildings

Accumulated depreciation-equipment

Advertising expense

Allowance of doubtful accounts

Bonds payable

Buildings

Cash

Cash dividends

Common stock

Equipment

Freight-in

Gain of sale of land

Income tax expense

Insurance expense

Interest on bonds and notes

Inventory

Land

Legal and professional services

Notes payable

Notes receivable

Purchase discounts

Purchases

Rent revenue

Retained earnings

Salaries-officers

Salaries-sales

Salaries and wages payable

Sales discounts

Sales returns and allowances

Sales revenue

Supplies

Travel and entertainment

AB C E F G H J L M N P R S T U Y 1 The following is the schedule of accounts of Thompson Corporation on Decembe Instructions Prepare a multistep income statement THOMPSON CORPORATION Income Statement For the Year Ended December 31, 2020 Sales Net sales Cost of goods sold Gross profit 645,000 (645,000) Operating expenses Selling expenses THOMPSON CORPORATION Schedule of Accounts December 31, 2020 Debit Credit Purchase Discounts $ 10,000 Cash $ 178,700 Accounts Receivable 105,000 Rent Revenue 18,000 Retained Earnings 160,000 Salaries and Wages Payable 18,000 Sales Revenue 1,100,000 Notes Receivable 110,000 Accounts Payable 49,000 Accumulated Depreciation-Equipment 28,000 Sales Discounts 14,500 Sales Returns and Allowances 17,500 Notes Payable 70,000 Salaries-Sales 112.000 Salaries-Officers 56.000 Legal and Professional Services 32,000 Advertising Expense 90,000 Travel & Entertainment for Sales Personnel 30,000 Insurance Expense 11,000 Common Stock 300,000 Income Tax Expense 53,900 Interest on Bonds and Notes 11,000 Cash Dividends 45,000 Allowance for Doubtful Accounts 5,000 Supplies 14,000 Freight-In 20,000 Land 70,000 Equipment 140,000 Bonds Payable 100,000 Gain on Sale of Land 30,000 Accumulated Depreciation - Buildings 19,600 Inventory 89,000 Buildings 98,000 610,000 Totals $ 1,907,600 $ 1,907,600 Administrative expenses 2 3 4 5 6 7 8 9 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 Income from operations (645,000) Other revenues and gains (645,000) Other expenses and losses Purchases A physical count of inventory on December 31resulted in an inventory amount of $64,000; thus, cost of goods sold for 2020 is $645,000. Income before income tax Income tax Net income for the year (645,000) 53,900 (698,900) $