The following account balances were included in the trial balance of Reid Corporation at June 30, 2020:

During 2020, Reid incurred production salary and wage costs of $710,000, consumed raw materials and other production supplies of $474,670, and had an increase in work-in-process and finished goods inventories of $112,900. The Retained Earnings account had a balance of $292,000 at June 30, 2020, before closing. There are 180,000 common shares outstanding. Assume Reid has elected to adopt IFRS.

Production payroll and materials costs reduced by the increase in ending work-in-process and finished goods inventories = the cost of goods sold.

Instructions

a. Prepare an income statement for the year ended June 30, 2020, using the multiple-step format and showing expenses by function.

b. Prepare the retained earnings portion of the statement of changes in equity for the year ended June 30, 2020.

c. Prepare an income statement for the year ended June 30, 2020, using the single-step format and showing expenses by nature.

d. Assume the average market price of the common shares outstanding was $31.70. What was Reid?s price-earnings ratio?

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Telephone and Internet expense (office) Salaries and wages (office) Supplies expense (sales) Repairs and maintenance expense (office) Depreciation understatement due to error-2018 (net of tax of $3,300) Miscellaneous expense (office) Sales revenue $1,835,050 $ 2,820 7,320 Cost of goods sold Salaries and wages expense (sales) Sales commission expense Advertising expense (sales) Freight out Entertainment expense (sales) Telephone and Internet expense (sales) Depreciation of sales equipment Repairs and maintenance expense (sales) Miscellaneous expenses (sales) Supplies expense (office) Depreciation expense on office furniture and equipment 1,071,770 56,260 97,600 4,850 28,930 9,130 21,400 14,820 17,700 9,030 6,000 Dividend revenue 4,980 38,000 Interest expense Income tax expense Dividends declared on preferred 18,000 6,200 133,000 4,715 shares 3,450 9,000 Dividends declared on common shares 7,250 32,000