90.2K

Verified Solution

Link Copied!

Presented below is information that relates to Duffin Limited for 2023: Collections of Accounts Receivable................................................................... $1,100,000 Retained Earnings, January 1, 2023.................................................................. 800,000 Sales Revenue.................................................................................................. 1,900,000 Selling and Administrative Expenses................................................................ 290,000 Loss from Flood Damage.................................................................................. 350,000 Dividends......................................................................................................... 34,000 Cost of Goods Sold........................................................................................... 1,100,000 Loss resulting from calculation error on depreciation charge in 2021 (pre-tax)... 460,000 Interest Revenue.............................................................................................. 180,000 Interest Expense.............................................................................................. 120,000 Loss on Loan Settlement (Loss from early repayment, net of tax)...................... 340,000 Gain on Foreign Currency (pre-tax)................................................................... 220,000 Additional information: 1. Early in 2023, Duffin changed depreciation methods for its plant assets from the double- declining-balance to the straight-line method. The affected assets were purchased at the beginning of 2018 for $200,000, had no residual value, and had useful lives of 10 years. Depreciation expense of $20,000 is included in the selling and administrative expenses of $290,000. 2. On September 1, 2023, Duffin sold one of its segments (product line) to Best Industries for a gain (pre-tax) of $550,000. During the period January 1 to August 31, the discontinued segment incurred an operating loss (pre-tax) of $480,000. This loss is not included in any of the numbers shown above. 3. Included in selling and administrative expenses are credit losses of $19,000. Duffin bases its credit losses upon a percentage of sales. In 2021 and 2022, the percentage was 0.5 %. In 2023, the percentage was changed to 1%. Instructions In good form, prepare a multiple-step income statement for 2023. Assume a 20% income tax rate and that 20,000 common shares were outstanding during the year

Answer & Explanation Solved by verified expert

See Answer