Question

Question 4 The following information is related to Oriole Company for 2020. Retained earnings balance, January 1, 2020 $1,254,400 Sales Revenue 32,000,000 Cost of goods sold 20,480,000 Interest revenue 89,600 Selling and administrative expenses 6,016,000 Write-off of goodwill 1,049,600 Income taxes for 2020 1,592,320 Gain on the sale of investments 140,800 Loss due to flood damage Loss on the disposition of the wholesale division (net of tax) 563,200 Loss on operations of the wholesale division (net of tax) 115,200 Dividends declared on common stock 320,000 Dividends declared on preferred stock 102,400 Oriole Company decided to discontinue its entire wholesale operations (considered a discontinued operation) and to retain its manufacturing operations. On September 15, Oriole sold the wholesale operations to Rogers Company. During 2020, there were 500,000 shares of common stock outstanding all year. 499,200

Answer 1

Answer ;-

Income Statement
Revenues
Sales revenue		$32,000,000
Cost of goods sold		-20,480,000
Gross profit		11,520,000
Operating expenses:
Selling and administrative expenses	-$6,016,000
Total Operating expenses		-6,016,000
Operating Profit		$5,504,000
Other revenues:
Interest revenue	$89,600
Gain on the sale of investments	$140,800
Other expenses:
Write-off of goodwill	-$1,049,600
Loss due to flood damage	-$499,200
		-1,318,400
Profit before tax		$4,185,600
Income tax expense for 2020		-$1,592,320
Net Income from countinuing operations		$2,593,280
Discontinued operations:
Loss on the disposition of the wholesale division		-$563,200
Loss on operations of the wholesale division		-$115,200
Net Income		$1,914,880
Earning per share { ( Net Income-preferred dividend( / Number of common shares) {( $1,914,880-$104,200)/500,000)		$3.62

Statement of Retained Earnings
Retained earnings, Beginning		$1,254,400
Add:Net Income	$1,914,880
Less:Dividends - common stock	-$320,000
Less:Dividends - Preferred stock	-$102,400
		$1,492,480
Retained earnings, Ending		$2,746,880