1. The following are selected accounts taken from the adjusted trial balances of the Purell Merchandise...

 

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1. The following are selected accounts taken from the adjusted trial balances of the Purell Merchandise company on December 31, 2021: Inventory, January 1, 2021 Selling expenses Loss on sale of equipment Rent revenue $120,000 $32,500 $7,500 $15,250 Inventory, December 31, 2021 Interest expense $105,000 $1,000 Sales revenue Sales return &allowance Sales discount Purchases $190,000 Purchase discount & return $10,000 Interest income $850 $45,000 Administrative expenses Cash dividends to common stocks $7,200 A tornado destroyed a warehouse in 2021, resulting in a pretax loss of $8,000. $300,000 $2,000 $1,000 Additional information: 1. The company sold Division K (a component of the company) in 2021. The numbers provided above do not include Division K. The book value of Division K's net assets is $110,000 at the time of sale. The company sold Division K for cash $80,000. During 2021 before its sale, Division K earned revenues of 105,000 and incurred expenses of 67,500 (which do not include income tax expense). 2. 24,000 shares of common stock were outstanding the entire year. 3. Income tax rate for all items is 21%. Required (35 points): Prepare an Income Statement in good form for the Purell Company on December 31, 2021. 1. The following are selected accounts taken from the adjusted trial balances of the Purell Merchandise company on December 31, 2021: Inventory, January 1, 2021 Selling expenses Loss on sale of equipment Rent revenue $120,000 $32,500 $7,500 $15,250 Inventory, December 31, 2021 Interest expense $105,000 $1,000 Sales revenue Sales return &allowance Sales discount Purchases $190,000 Purchase discount & return $10,000 Interest income $850 $45,000 Administrative expenses Cash dividends to common stocks $7,200 A tornado destroyed a warehouse in 2021, resulting in a pretax loss of $8,000. $300,000 $2,000 $1,000 Additional information: 1. The company sold Division K (a component of the company) in 2021. The numbers provided above do not include Division K. The book value of Division K's net assets is $110,000 at the time of sale. The company sold Division K for cash $80,000. During 2021 before its sale, Division K earned revenues of 105,000 and incurred expenses of 67,500 (which do not include income tax expense). 2. 24,000 shares of common stock were outstanding the entire year. 3. Income tax rate for all items is 21%. Required (35 points): Prepare an Income Statement in good form for the Purell Company on December 31, 2021.

Answer rating: 100% (QA)

Income Statement For the Year Ended December 31 2021 Revenues Sales revenue 300000 Rent revenue 152... View the full answer