Multiple-step income statement
Asked Oct 9, 2006, 01:51 PM
Can someone help me with the following problem.
The following items were taken from the records of Moonlight Video Inc. for the calendar year 2007:
Prior period error $ 40,000
Cash dividends declared 80,000
Cost of sales 300,000
Selling and administrative expenses 350,000
Interest income 15,000
Interest expense (25,000)
Beginning retained earnings 800,000
Extraordinary gain 50,000
Gain from the sale of the VCR segment 200,000
Operating loss from the VCR segment $(80,000)
Ending number of shares of common stock 90,000
Weighted-average number of common shares outstanding 100,000
Tax rate - 30%
1.) Using the information above, prepare a multiple-step income statement for 2007 including EPS disclosure.
(I got stuck on this part but this is what I have so far.)
For the Year Ended December 31, 2007
1,000,000Cost of sales
Selling and administractive expenses
350,000Loss from the VCR segment
(80,000)Gain from the sale of VCR segment
(25,000)Income before Income taxes
460,000Income tax expense
138000 Net Income
I am not sure if I did this correctly because I wasn't sure where I would put the prior period error, the extraordinary gain and if I put the loss and gain from the sale of the VCR segment in the right spot.
I cannot do the EPS disclosure or the statement of retained earnings until I find the net income.
Any help would greatly be appreciated.