Navaria Inc. manufactures and sells chair lift mobility aids. These are chairlift systems designed for in home use to aid persons with mobility challenges. The company sells its systems online and through a network of independent sales agents. Installation of the systems is done by independent contractors hired directly by Navaria’s customers. The following information was taken from Navaria’s financial records for the year ended June 30, 2020:

Required

a. Prepare a multi-step statement of income for the year ended June 30, 2020 that reports expenses by nature.

b. Prepare a multi-step statement of income for the year ended June 30, 2020 that reports expenses by function.

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(in thousands of dollars) $ 9,550 Administrative expenses Cost of goods sold 79,159 Other expenses 641 Financing expenses 825 (in thousands of dollars) Interest revenue 630 4,953 Income tax expense Sales revenue 119,728 Rental of Wages Equipment Advertising Depreciation Engineering activities $524 $1,927 $65 128 Research and development activities 774 33 Sales and marketing activities 5,866 3,586 26