Question

The following information is related to Buffalo Company for 2017.

Retained earnings balance, January 1, 2017		$997,830
Sales Revenue		26,123,300
Cost of goods sold		16,214,400
Interest revenue		78,400
Selling and administrative expenses		4,737,300
Write-off of goodwill		827,800
Income taxes for 2017		1,287,700
Gain on the sale of investments		113,900
Loss due to flood damage		397,600
Loss on the disposition of the wholesale division (net of tax)		457,400
Loss on operations of the wholesale division (net of tax)		96,820
Dividends declared on common stock		249,400
Dividends declared on preferred stock		78,330

Buffalo Company decided to discontinue its entire wholesale operations (considered a discontinued operation) and to retain its manufacturing operations. On September 15, Buffalo sold the wholesale operations to Rogers Company. During 2017, there were 490,600 shares of common stock outstanding all year.

Prepare a multistep income statement.

Answer 1

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Multistep Income Statement:
Sales Revenue			$ 26,123,300
Cost of Goods Sold			$-16,214,400
Gross Profit/Loss			$    9,908,900
Selling and Administrative Expense			$ -4,733,300
Income from Operations			$    5,175,600
Other Revenue and Gains:
Interest Revenue		$    78,400
Gain on Sale of Investments		$ 113,900
			$       192,300
Other Expenses and Losses:
Write-off of Goodwill		$ 827,800
Loss from flood damage		$ 397,600
			$ -1,225,400
Income from Continuing operations before income tax			$    4,142,500
Income Tax			$ -1,287,700
Income from Continuing operations			$    2,854,800
Discontinued Operations:
Loss on Disposal, Net of Tax		$ 457,400
Loss on Operations, Net of Tax		$    96,820
			$     -554,220
Net Income			$    2,300,580
Less: Preferred Dividends			$        -78,330
Income available for Common Stockholders		A	$    2,222,250
No of Common Stocks		B	490,600
Earning per Share		A/B	$             4.53
Retained Earning:
Retained Earning, January 1 2017			$       997,830
Add: Net Income			$    2,300,580
			$    3,298,410
Less:
Common Stock Dividend		$ 249,400
Preferred Stock Dividend		$    78,330
			$     -327,730
Retained Earning, December 31 2017			$    2,970,680