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The adjusted trial balance at December 31, 2015, for Dykstra Inc. follows: DYKSTRA INC. Adjusted Trial Balance December 31, 2015 Credit $ Debit 4,500 11,100 29,000 2,500 150,000 500,000 $ 40,000 95,000 Cash Accounts receivable Merchandise inventory Prepaid insurance Land Buildings Accumulated depreciation-buildings Equipment Accumulated depreciation-equipment Accounts payable Property tax payable Bank loan payable-short-term Mortgage payable Common shares Retained earnings Dividends Sales Sales returns and allowances Sales discounts Cost of goods sold Administrative expenses Selling expenses Interest expense Interest revenue Income tax expense 18,000 10,600 4,000 25,000 551,000 70,000 61,000 10,000 536,800 6,700 5,000 363,400 111,500 19,600 4,600 2,500 6,000 $1,318,900 $1,318,900 . . Additional information: $21,000 of the mortgage is due within the next year. Dykstra issued $5,000 of common shares during the year. Instructions Assuming Dykstra uses a perpetual inventory system, prepare a multiple-step income state- ment, statement of changes in equity, and statement of financial position for the year. Action Plan Prepare the income statement in steps: 1. Sales less sales returns and allowances and sales discounts equals net sales. 2. Net sales less cost of goods sold equals gross profit. 3. Gross profit less operating expenses (classified by function in this case as selling and administrative expenses) equals profit from operations. 4. Profit from operations plus non-operating revenues and gains or minus expenses and losses equals profit before income tax

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