The Fanta Company presents you with the following account balances taken from its December 31, 2007 adjusted trial balance:
Inventory, January 1, 2007 ............. $ 43,000
Selling expenses ................. 35,000
Extraordinary gain (pretax) ............ 23,000
Purchases ................... 100,000
Sales .................... 250,000
General and administrative expenses ......... 22,000
Purchases returns ................ $3,500
Interest expense .................. 4,000
Sales discounts taken ............... 2,000
Gain on sale of property (pretax) ......... 7,000
Freight-in .................. 5,000
Additional data:
1. A physical count reveals an ending inventory of $22,500 on December 31, 2007.
2. Twenty-five thousand shares of common stock have been outstanding the entire year.
3. The income tax rate is 30% on all items of income.
Required
1. As a supporting document for Requirements 2 and 3, prepare a separate schedule for Fanta Company’s cost of goods sold.
2. Prepare a 2007 multiple-step income statement.
3. Prepare a 2007 single-step income statement.