The information below is taken from the December 31, 2014 adjusted trial balance of Rummer Company (all numbers are pre-tax):
|
Freight-in
|
$7,500
|
|
General and administrative expenses
|
50,000
|
|
Interest expense
|
15,000
|
|
Inventory, 1/1/14
|
140,000
|
|
Inventory, 12/31/14
|
165,000
|
|
Loss on sale of a major component of the business
|
15,000
|
|
Purchases
|
330,000
|
|
Purchases returns
|
5,000
|
|
Sales
|
700,000
|
|
Sales discounts taken
|
10,000
|
|
Selling expenses
|
25,000
|
The income tax rate is 30%. There were 25,000 shares of common stock outstanding throughout the year.
Required:
a.Prepare a schedule of the cost of goods sold.
b.Prepare a 2014 income statement for Rummer Company, using a single-step format (disregard earnings per share).