Question

In: Accounting

Selected information about income statement accounts for the Reed Company is presented below (the company's fiscal...

Selected information about income statement accounts for the Reed Company is presented below (the company's fiscal year ends on December 31):

2016 2015
  Sales $ 4,700,000 $ 3,800,000
  Cost of goods sold 2,920,000 2,060,000
  Administrative expenses 860,000 735,000
  Selling expenses 420,000 372,000
  Interest revenue 156,000 146,000
  Interest expense 212,000 212,000
  Loss on sale of assets of discontinued component 74,000

On July 1, 2016, the company adopted a plan to discontinue a division that qualifies as a component of an entity as defined by GAAP. The assets of the component were sold on September 30, 2016, for $74,000 less than their book value. Results of operations for the component (included in the above account balances) were as follows:

1/1/16-9/30/16 2015
  Sales $ 460,000 $ 560,000
  Cost of goods sold (320,000 ) (356,000 )
  Administrative expenses (56,000 ) (46,000 )
  Selling expenses (26,000 ) (36,000 )
  Operating income before taxes $ 58,000 $ 122,000

       In addition to the account balances above, several events occurred during 2016 that have not yet been reflected in the above accounts:

1.

A fire caused $56,000 in uninsured damages to the main office building. The fire was considered to be an infrequent but not unusual event.

2.

Inventory that had cost $46,000 had become obsolete because a competitor introduced a better product. The inventory was sold as scrap for $6,000.

3. Income taxes have not yet been recorded.
Required:

Prepare a multiple-step income statement for the Reed Company for 2016, showing 2015 information in comparative format, including income taxes computed at 20% and EPS disclosures assuming 500,000 shares of common stock. (Amounts to be deducted should be indicated with a minus sign. Round EPS answers to 2 decimal places.)

Solutions

Expert Solution

ANSWER:-

If you have any query please ask me in comment box iam here to helps you dont give direct Thumbs down.if you satisfied my work give me Thumbs UP .....Thank you


Related Solutions

Selected information about income statement accounts for the Reed Company is presented below (the company's fiscal...
Selected information about income statement accounts for the Reed Company is presented below (the company's fiscal year ends on December 31): 2021 2020 Sales revenue $ 4,600,000 $ 3,700,000 Cost of goods sold 2,900,000 2,040,000 Administrative expense 840,000 715,000 Selling expense 400,000 342,000 Interest revenue 154,000 144,000 Interest expense 208,000 208,000 Loss on sale of assets of discontinued component 64,000 — On July 1, 2021, the company adopted a plan to discontinue a division that qualifies as a component of...
Selected information about income statement accounts for the Reed Company is presented below (the company's fiscal...
Selected information about income statement accounts for the Reed Company is presented below (the company's fiscal year ends on December 31): 2018 2017 Sales $ 5,050,000 $ 4,150,000 Cost of goods sold 2,990,000 2,130,000 Administrative expenses 930,000 805,000 Selling expenses 490,000 442,000 Interest revenue 163,000 153,000 Interest expense 226,000 226,000 Loss on sale of assets of discontinued component 102,000 — On July 1, 2018, the company adopted a plan to discontinue a division that qualifies as a component of an...
Selected information about income statement accounts for the Reed Company is presented below (the company's fiscal...
Selected information about income statement accounts for the Reed Company is presented below (the company's fiscal year ends on December 31): 2016 2015   Sales $ 4,550,000 $ 3,650,000   Cost of goods sold 2,890,000 2,030,000   Administrative expenses 830,000 705,000   Selling expenses 390,000 342,000   Interest revenue 153,000 143,000   Interest expense 206,000 206,000   Loss on sale of assets of discontinued component 62,000 — On July 1, 2016, the company adopted a plan to discontinue a division that qualifies as a component of an...
Selected information about income statement accounts for the Reed Company is presented below (the company's fiscal...
Selected information about income statement accounts for the Reed Company is presented below (the company's fiscal year ends on December 31): 2018 2017 Sales $ 4,450,000 $ 3,550,000 Cost of goods sold 2,870,000 2,010,000 Administrative expenses 810,000 685,000 Selling expenses 370,000 322,000 Interest revenue 151,000 141,000 Interest expense 202,000 202,000 Loss on sale of assets of discontinued component 54,000 — On July 1, 2018, the company adopted a plan to discontinue a division that qualifies as a component of an...
Selected information about income statement accounts for the Reed Company is presented below (the company's fiscal...
Selected information about income statement accounts for the Reed Company is presented below (the company's fiscal year ends on December 31): 2016 2015   Sales $ 5,200,000 $ 4,300,000   Cost of goods sold 3,020,000 2,160,000   Administrative expenses 960,000 835,000   Selling expenses 520,000 472,000   Interest revenue 166,000 156,000   Interest expense 232,000 232,000   Loss on sale of assets of discontinued component 114,000 — On July 1, 2016, the company adopted a plan to discontinue a division that qualifies as a component of an...
Selected information about income statement accounts for the Reed Company is presented below (the company's fiscal...
Selected information about income statement accounts for the Reed Company is presented below (the company's fiscal year ends on December 31): 2021 2020 Sales revenue $ 5,250,000 $ 4,350,000 Cost of goods sold 3,030,000 2,170,000 Administrative expense 970,000 845,000 Selling expense 530,000 472,000 Interest revenue 167,000 157,000 Interest expense 234,000 234,000 Loss on sale of assets of discontinued component 116,000 — On July 1, 2021, the company adopted a plan to discontinue a division that qualifies as a component of...
Selected information about income statement accounts for the Reed Company is presented below (the company's fiscal...
Selected information about income statement accounts for the Reed Company is presented below (the company's fiscal year ends on December 31): 2018 2017 Sales $ 4,600,000 $ 3,700,000 Cost of goods sold 2,900,000 2,040,000 Administrative expenses 840,000 715,000 Selling expenses 400,000 352,000 Interest revenue 154,000 144,000 Interest expense 208,000 208,000 Loss on sale of assets of discontinued component 66,000 — On July 1, 2018, the company adopted a plan to discontinue a division that qualifies as a component of an...
Selected information about income statement accounts for the Reed Company is presented below (the company's fiscal...
Selected information about income statement accounts for the Reed Company is presented below (the company's fiscal year ends on December 31): 2018 2017 Sales $ 4,500,000 $ 3,600,000 Cost of goods sold 2,880,000 2,020,000 Administrative expenses 820,000 695,000 Selling expenses 380,000 332,000 Interest revenue 152,000 142,000 Interest expense 204,000 204,000 Loss on sale of assets of discontinued component 58,000 — On July 1, 2018, the company adopted a plan to discontinue a division that qualifies as a component of an...
6. Selected information about income statement accounts for the Reed Company is presented below (the company's...
6. Selected information about income statement accounts for the Reed Company is presented below (the company's fiscal year ends on December 31): 2021 2020 Sales revenue $ 5,300,000 $ 4,400,000 Cost of goods sold 3,040,000 2,180,000 Administrative expense 980,000 855,000 Selling expense 540,000 482,000 Interest revenue 168,000 158,000 Interest expense 236,000 236,000 Loss on sale of assets of discontinued component 120,000 — On July 1, 2021, the company adopted a plan to discontinue a division that qualifies as a component...
7. Selected information about income statement accounts for the Reed Company is presented below (the company's...
7. Selected information about income statement accounts for the Reed Company is presented below (the company's fiscal year ends on December 31): 2018 2017 Sales $ 4,450,000 $ 3,550,000 Cost of goods sold 2,870,000 2,010,000 Administrative expenses 810,000 685,000 Selling expenses 370,000 322,000 Interest revenue 151,000 141,000 Interest expense 202,000 202,000 Loss on sale of assets of discontinued component 54,000 — On July 1, 2018, the company adopted a plan to discontinue a division that qualifies as a component of...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT