The following balances were taken from the books of Quality Fabrication Limited on December 31, 2020:

Assume the total effective tax rate on all items is 25%.

Instructions

Prepare a multiple-step income statement showing expenses by function. Assume that 150,000 common shares were outstanding during the year. Quality Fabrication Limited follows ASPE but decides to disclose EPS on its income statement.

Transcribed Image Text:

$ 70,000 Accumulated depreciation–equipment $ 32,000 Interest income Accumulated depreciation-buildings 23,000 125,000 160,000 140,000 Cash Sales revenue Accounts receivable Prepaid insurance Sales returns and allowances Allowance for doubtful accounts Sales discounts Land Equipment Buildings Cost of goods sold 1,120,000 Notes receivable 122,000 Selling expenses 16,000 Accounts payable 118,000 Bonds payable 6,000 Administrative expenses 40,000 Unearned revenue 80,000 Interest expense 160,000 Notes payable 81,000 80,000 50,000 80,000 124,000 50,000 Loss from storm damage 504,000 Depreciation expense