Reference no: EM132657319

Select information below is taken from the December 31, 2020 adjusted trial balance of Rummer Company:

Freight-in $7,500

General and administrative expenses 50,000

Interest expense 15,000

Inventory 165,000

Loss on sale of a major component of the business (pretax) 15,000

Purchases 330,000

Purchases returns 5,000

Sales 700,000

Sales discounts 10,000

Selling expenses 25,000

The inventory on January 1 was $140,000. The income tax rate is 30%. There were 25,000 shares of common stock outstanding throughout the year.

Required:

Question a. Create a schedule of the cost of goods sold.

Question b. Create a 2020 income statement for Rummer Company, using a multiple-step format (disregard earnings per share).

Question c. Create a 2020 income statement for Rummer Company, using a single-step format (disregard earnings per share).