Question

SOURCES Net sales Cost of goods sold Selling expenses Administrative expenses Dividend revenue Interest revenue $1,324,900 788.800 67,600 54,300 27,900 8,170 Write-off of inventory due to obsolescence Depreciation expense omitted by accident in 2016 Casualty loss Cash dividends declared Retained earnings at December 31, 2016 Effective tax rate of 34% on all items $80.970 46,300 51.500 46,010 1,020,840 Prepare a multiple-step income statement for 2017. Assume that 52.230 shares of common stock are outstanding. Round earning share

Answer 1

Answer: Income Statement for the year ended December 31, 2017 Sales Revenue Net Sales Cost of Goods Sold Gross Profit Operating Expenses Selling Expenses Administrative Expenses Total Operating Expenses Income from Operations Other Revenues and Gains: Dividend Revenue Interest Revenue 1,324,900 788,800 536,100 67,600 54,300 121,900 414,200 27,900 8,170 36,070 378,130 Other Expenses and Losses Write off of Inventory due to Obsolescence Income before Taxes and Extraordinary letm Income Taxes Income before Extraordinary letm Extraordinary Item: Casualty Loss Net Income 80,970 297,160 101,034 196,126 51,500 144,626

Retained Earnings Statement for the year ended December 31, 2017 1,020,840 -30,558 990,282 Balance, Jan 1 as reported Correction for overstatement of Net Income in prior period Balance, Jan 1 as adjusted Add: Net Income 144,626 1,134,908 46,010 1,088,898 Less: Dividend declared Balance, Dec 31