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-   -   Multiple-step income statement in good form and retained earnings statement (https://www.askmehelpdesk.com/showthread.php?t=150789)

  • Nov 11, 2007, 08:39 AM
    fustrated
    Multiple-step income statement in good form and retained earnings statement
    Hi
    I would like someone to check to see if I did this correctly, if I did not then please help.
    Thanks
    The Problem is:
    The following pretax amounts pertain to River Corp. for the year ended December 31, 2008.
    Sales... $400,000
    Operating Expenses... 84,000
    Extraordinary gain... 30,000
    Interest Expense... 4,000
    Cost of goods sold... 280,000
    Gain on sale of equipment... 10,000
    Prior period adjustment... (16,000)
    Gain on disposal of business component... 40,000
    Retained earnings, January 1, 2008... 1,600,000
    Dividends declared... 12,000

    The effective corporate tax rate is 30 percent. The company had 10,000 shares of common stock outstanding for the entire year.

    1.) Prepare a multiple-step income statement in good form for the year ended December 31, 2008.
    2.) Prepare a retained earnings statement in good form for the year ended December 31, 2008

    1.) River Corp.
    Multiple-step Income Statement
    For the Year ended December 31, 2008
    Revenue:
    Sales... 400,000
    Cost of goods sold... 280,000
    Gross Profit... 120,000

    Operating Expenses... 84,000
    Operating Income... 36,000

    Other Revenues and gains:
    Gain on Sale of Equipment... 10,000
    Other Expenses and losses:
    Interest Expense... 4,000
    Income from continuing operations before income tax... 42,000
    Income from continuing operations after tax... 12,600
    Income from continuing operation... 29,400
    Discontinued Operations:
    Gain of disposal of business components... 40,000
    Extraordinary gain... 30,000
    Net Income... 99,400
    Earnings per common share:
    Income from continuing operations... 2.94
    Discontinued operations... 4.00
    Extraordinary gain... 3.00
    Net Income... 9.94

    2.) Retained earning unadjusted beginning balance... 1,600,000
    Deduct prior period adjustments... 16,000
    Retained earnings, Adjusted beginning balance... 1,584,000
    Net Income... 99,400
    ... 1,683,400
    Deduct dividends... 12,000
    Retained Earnings December 31, 2008... 1,671,400
  • Feb 17, 2011, 10:33 AM
    sharon69
    Richmond Wins, Inc. had the following alphabetical list of accounts taken from its adjusted trial balance at December 31, 20B:

    Accounts Payable $10,000
    Accounts Receivable 14,000
    Accumulated Depreciation-Building 13,400
    Advertising Expense 6,400
    Building 75,000
    Capital Stock 40,000
    Cash 10,000
    Cost of Goods Sold 52,000
    Depreciation Expense 1,000
    Insurance Expense 1,900
    Interest Payable 1,400
    Inventory of Merchandise 30,000
    Land 15,000
    Prepaid Insurance 2,200
    Rent Revenue 1,700
    Retained Earnings (Jan. 1, 20B) 65,900
    Salaries Expense 24,000
    Salaries Payable 3,800
    Sales 100,000
    Supplies 400
    Supplies Expense 800
    Unearned Rent Revenue 100

    Required:
    A. Prepare a multiple step income statement for 20B. (Include gross profit, but ignore income taxes.)

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