Multiple-step income statement

Question 1:

The Goody Shop Ltd.’s unadjusted trial balance accounts and amounts (prior to recording any adjusting journal entries) appears as follows, in alphabetical order, on December 31, 2020, the end of its fiscal year:

  Dr Cr
Accounts payable   $26,000
Accounts receivable $130,000  
Accumulated depreciation – Building   $10,400
Administrative expenses $96,000  
Allowance for doubtful accounts   $1,200
Ask Accountant   $350,000
Building $280,000  
Cash $58,000  
Common shares   $20,000
Cost of goods sold (COGS) $550,000  
Dividend income   $200
Dividends $1,500  
Equipment $75,000  
Freight out $11,000  
Freight payable   $9,500
Goodwill $65,000  
GST payable   $5,000
Insurance expense $700  
Interest expense $900  
Interest income   $500
Inventory $29,000  
Investment in Bonds – TGS Ltd $10,445  
Investment in RNG Ltd. $21,000  
Land $80,000  
Note payable   $20,000
Property tax expense $5,500  
Rent expense $6,000  
Retained earnings   $153,745
Salaries and benefits $100,000  
Sales   $940,000
Sales discounts $19,000  
Telephone expense $2,500  
Unearned revenue   $9,000
Utilities expense $4,000  
Total $1,545,545 $1,545,545


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Additional notes:

  1. The Land and Building was purchased January 1, 2019. The building had been estimated to have a useful life of 25 years and a residual value of $20,000. The company uses straight-line depreciation for the
  2. At January 1, 2020 there were 200,000 common shares outstanding with a total value of


  1. During the year cash dividends of $1,500 were
  2. The Equipment was purchased on February 1, 2020 and is estimated to have a useful life of five years and a residual value of $5,000. The company uses double diminishing balance depreciation method for the
  3. Ignore any income tax
  4. Please round all final amounts to a whole
  5. Please add additional accounts as



  1. Prepare a multiple-step income statement in good form. Please include a gross profit % on your income



  1. Prepare a Statement of Changes in Equity in good form.


  1. Prepare a classified Statement of Financial Position (Balance Sheet) in good form.

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