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The information below pertains to the operations of Montreal Retail Corporation for the year ended 31 December 20X6: Cost of merchandise sold $ 109,000 Inventory
The information below pertains to the operations of Montreal Retail Corporation for the year ended 31 December 20X6: Cost of merchandise sold $ 109,000 Inventory warehousing cost 27,000 Accounts payable 127,000 Sales revenue 595,000 Accumulated depreciation 147,000 Sales returns 5,700 Unearned revenue 2,700 Depreciation expense 57,000 Rent revenue 4,700 Employee wages, salaries, and benefits 107,000 Interest expense 6,700 Investment revenue 3,700 Loss on disposal of geographic segment 37,000 Earnings from discontinued geographic segment 27,000 Distribution expenses 113,000 General and administrative expenses 53,000 Loss on sale of noncurrent assets 13,700 Income tax expense ? Fire loss 27,000 Additional information: Functional costs do not include depreciation or employee costs. Depreciation expense pertains 50% to warehousing cost, 30% to administrative costs, and 20% to distribution expense. Employee wages, salaries, and benefits pertain 25% to warehousing and merchandising, 40% to administrative costs, and 35% to distribution expense. The companys income tax rate is 20%. Assume that the tax rate pertains to all elements of revenue, expense, gain, and loss. Required: 1. Prepare an income statement on the basis of nature of expense, using a single-step format. (Loss amounts should be indicated by a minus sign.) 2. Prepare an income statement on a functional basis in a multiple-step format. (Loss amounts should be indicated by a minus sign.)
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