Question

Problem 4-04 The following account balances were included in the trial balance of Swifty Corporation at June 30, 2020. Sales revenue Sales discounts Cost of goods sold Salaries and wages expense (sales) Sales commissions Travel expense (salespersons) Delivery expense Entertainment expense Telephone and Internet expense (sales) Depreciation expense (sales equipment) Maintenance and repairs expense (sales) Miscellaneous selling expenses Office supplies used Telephone and Internet expense (administration) $1,590,740 32,570 899,700 57,350 98,130 34,600 22,690 14,980 9,100 5,289 5,707 4,898 3,373 2,560 Depreciation expense (office furniture and equipment) Property tax expense Bad debt expense (selling) Maintenance and repairs expense (administration) Office expense Sales returns and allowances Dividends received Interest expense Income tax expense Depreciation understatement due to error-2020 (net of tax) Dividends declared on preferred stock Dividends declared on common stock $6,648 7,291 4,393 9,659 5,460 68,403 39,210 19,510 94,670 16,437 9,300 39,450 The Retained Earnings account had balance of $361,900 at July 1, 2019. There are 78,560 shares of common stock outstanding. Using the multiple-step form, prepare an income statement for the year ended June 30, 2020. (Round earnings per share to 2 decimal places, e.g. 1.48.) SWIFTY CORPORATION Income Statement

Answer 1

Swifty Corporation Profit and loss account for the year ended June 30, 2020 $ $ Particulars Revenue from operations Sales Revenue Less: Sales Return and allowances 1,590,740 -68403 1,522,337 39,210 1,561,547 899,700 57,350 19,510 5,289 6,648 11 Other income Dividend received 111 Total Revenue (I + II) IV Expenses: Cost of materials consumed Employee benefits expense Finance costs Depreciation and amortization expense Sales Equipment Office furniture and equipment Other expenses Sales Discount Sales Commission Travel expenses (sales persons) Delivery expenses Entertainment expenses Telephone and internet expenses (sales) Telephone and internet expenses (administration) Maintenance and repairs expenses (sales) Maintenance and repairs expenses (administration) Miscellaneous selling expenses Other supplies used Property tax expenses Bad debt expenses (selling) Office expenses Total expenses (IV) v Profit before exceptional items and tax (1 - IV) VI Exceptional items VII Profit/(loss) before tax (V-VI) VIII Tax expense: (1) Current tax (2) Deferred tax 32,570 98,130 34,600 22,690 14,980 9,100 2,560 5,707 9,659 4,898 3,373 7,291 4,393 5,4601 1,243,908 317,639 317,639 94,670 94,670 222,969 IX Profit/(Loss) for the period from continuing operations (VII-VIII) X Profit/(loss) from discontinuing operations XI Tax expense of discontinuing operations XII Profit/(loss) from Discontinuing operations (after tax) (X-XI) XII Profit (Loss) for the period (IX + XII) 222,969

STATEMENT OF CHANGES IN EQUITY
Swifty Corporation
Statement of Changes in Equity for the period ended June 30, 2020
A. Equity Share Capital		$
Balance at the beginning of the reporting period	Changes in equity share capital during the year	Balance at the end of the reporting period
785,600	-	785,600
(78560 shares of $10 each)		(78560 shares of $10 each)

Note: Assuming face value of each share is $10.

B. Statement of changes in other Equity	$
Particulars	Retained Earnings
Balance at the beginning of the reporting period	361,900
Changes in accounting policy or prior period errors (prior error)	(16,437)
Restated balance at the beginning of the reporting period	345,463
Total Comprehensive Income for the year	222,969
Dividends paid (Dividend paid to preferred stock + common stock)	48,750
Transfer to retained earnings	-
Any other change (to be specified)	-
Balance at the end of the reporting period	519,682