Company XYZ had the following information during 2020:

1. Beginning inventory was $50,000. Purchases of inventory was $20,000. Ending inventory was 35% of beginning inventory at the end of the year.

2. Cash on hand was $325,000.

3. Sales revenue was $225,000.

4. Operating expenses were half of cost of goods sold.

5. Income tax rate was 20%.

Prepare an income statement for 2020 using the (1) single-step approach and (2) multiple-step approach. What are the advantages and disadvantages of each?

Answer rating: 100% (QA)

Single step approach I ncome statement for 2020 of xyz ltd Particulars Amount Amount revenues and gains Sales revenue 225000 Less Expenses and losses cost of goods sold working note 152500 Operating e... View the full answer