Question

Prepare retined earnings statement for 2017

Cost of goods sold Net sales $135,900 %200 Cash dividends declared There were 20,000 shares of mon stock outstanding during the year 16,000 Instructions (a) Prepare a multiple-step income statement. (b) Prepare a single-step income statement. (c) Which format do you prefer? Discuss. E4-8 (LO3,4) (Income Statement, EPS) Presented below are selected ledger accounts of Tucker Corporation as 31, 2017 Cash $ 50,000 Instr Selling expenses Net sales Cost of goods sold Cash dividends declared (2017) Cash dividends paid (2017) Discontinued operations (loss before income taxes) Depreciation Retained earnings, December 31, 2016 Effective tax rate 30% 540,000 210,000 20,000 15,000 30,000 90,000 expense, not recorded in 2016 Instructions (a) Compute net income for 2017. (b) Prepare a partial income statement beginning with income from continuing operations before income tax, and includ:- ing appropriate earnings per share information. Assume 10,000 shares of common stock were outstanding during 2017

Answer 1

Net sales	$        540,000
Less: Cost of goods sold	$        210,000
Administrative expenses	$        100,000
Selling expenses	$          80,000
Discontinued operations-loss	$          40,000
Income before income tax	$        110,000
Income tax ($63,900 × 30%)	$          33,000
Net income	$          77,000
TUCKER CORPORATION
Income Statement
For the Year Ended December 31, 2014
Income from continuing operations before Income tax (a)	$        150,000
Income tax   (b)	$          45,000
Income from continuing operations	$        105,000
Discontinued operations, net of tax	$        (28,000)	(40000*(100%-30%)
Net income /(loss)	$          77,000
Earnings per share
Income from continuing operations ( C )	$            10.50	(105000/10000)
Loss on discontinued operations, net of tax	$            (2.80)	(-28000/10000)
Net income / (Loss) (d )	$               7.70