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The information below pertains to the operations of Montreal Retail Corporation for the year ended 31 December 20X6. Cost of merchandise sold Inventory warehousing cost Accounts payable Sales revenue Accumulated depreciation Sales returns Unearned revenue Depreciation expense Rent revenue Employee wages, salaries, and benefits Interest expense Investment revenue Loss on disposal of geographic segment Earnings from discontinued geographic segment Distribution expenses General and administrative expenses Loss on sale of noncurrent assets Income tax expense Fire loss $119,000 37,000 137,000 695,000 157,000 6,700 3,700 67,000 5,700 117,000 7,700 4,700 47,000 37,000 123,000 63,000 14,700 ? 37,000 Additional information: Functional costs do not include depreciation or employee costs. Depreciation expense pertains 55% to warehousing cost, 25% to administrative costs, and 20% to distribution expense. Employee wages, salaries, and benefits pertain 30% to warehousing and merchandising, 45% to administrative costs, and 25% to distribution expense. The company's income tax rate is 25%. Assume that the tax rate pertains to all elements of revenue, expense, gain, and loss. 6 Required: 1. Prepare an income statement on the basis of nature of expense, using a single-step format. MONTREAL RETAIL CORPORATION Income Statement Year Ended 31 December 20X6 (in Canadian dollars) Revenues and gains. 0 Total revenues and gains Expenses and losses: Operating and administrative expenses Check 2 Prepare an income statement on a functional basis in a multiple-step format. (Loss amounts should be indicated by a minus sign.) MONTREAL RETAIL CORPORATION Income Statement Year Ended 31 December 20X6 (in Canadian dollars) Net sales 0 Operating and administrative expenses 0 0 Total operating and administrative expenses Income from operations Other revenues and gains 1 1 Total operating and administrative expenses Income from operations Other revenues and gains Other expenses and losses 1 I Income before income tax. |hromebetorescotruepeation I Netrincomendamprehensiveirama

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