The following adjusted trial balance for Bell Servicing was prepared at the end of the fiscal year,
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Question:
The following adjusted trial balance for Bell Servicing was prepared at the end of the fiscal year, December 31,2023:
Account Debit Credit
101 Cash $ 7,300
119 Merchandise inventory 15,500
125 Supplies 9,300
128 Prepaid insurance 3,300
165 Store equipment 50,300
166 Accumulated depreciation, store equipment $ 46,100
167 Office equipment 68,300
168 Accumulated depreciation, office equipment 33,500
201 Accounts payable 15,300
301 Jonah Bell, capital 25,080
302 Jonah Bell, withdrawals 40,300
413 Sales 284,800
415 Sales discounts 1,300
505 Cost of goods sold 74,100
612 Depreciation expense, store equipment 4,500
613 Depreciation expense, office equipment 3,100
622 Sales salaries expense 45,300
623 Office salaries expense 31,300
637 Insurance expense, store 1,300
638 Insurance expense, office 1,250
640 Rent expense, office space 12,300
641 Rent expense, selling space 16,300
651 Office supplies expense 1,130
652 Store supplies expense 1,700
655 Advertising expense 16,900
Totals $ 404,780 $ 404,780
Required:
1. Prepare a classified multiple−step income statement that would be used by the businesss owner.
2. Prepare a multiple−step income statement that would be used by external users.
3. Prepare a single−step income statement that would be provided to decision makers outside the company.
Analysis Component:
If you were a decision maker external to Bell Servicing, which income statement format would you prefer and why, if you had a choice?
Which income statement format(s) could you expect as an external user?
Related Book For
Fundamental Accounting Principles
ISBN: 978-0071051507
Volume I, 14th Canadian Edition
Authors: Larson Kermit, Tilly Jensen
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