Prepare a Single-Step Income Statement Using the Following Data for Leila

question 124

Essay

Prepare a single-step income statement using the following data for Leila Inc. for the year ended December 31, 2021.
$\begin{array}{l|r}\hline \text { Sales revenue } & \$ 210,000 \\\hline \text { Rental revenue } & 35,000 \\\hline \text { Distribution expense } & 23,000 \\\hline \text { Cost of goods sold } & 120,000 \\\hline \text { General and administrative expense } & 25,000 \\\hline \text { Depreciation expense } & 20,000 \\\hline \text { Interest expense } & 5,000 \\\hline \text { Income taxexpense ( } 20 \% \text { rate on all items) } & \\\hline \text { Gain on sale of building } & 15,000 \\\hline \text { Loss from fire damage } & 40,000\end{array}$

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Definitions:

Profit Maximizes

The process by which a firm determines the price and output level that leads to the highest profit.

Average Total Cost

The per unit cost of production, calculated by dividing total cost by the quantity of output produced.

Fixed Cost

Costs that do not change with the level of production or output, such as rent or salaries.

Average Fixed Cost

The fixed costs of production (costs that do not change with the level of output) divided by the quantity of output produced.