Question

The following information was taken from the records of Skysong Inc. for the year 2017: Income tax applicable to income from continuing operations $213,724; income tax applicable to loss on discontinued operations $28,186, and unrealized holding gain on available-for-sale securities (net of tax) $23,100. Gain on sale of equipment $97,400 Cash dividends declared $153,000 Loss on discontinued operations 82,900 Retained earnings January 1, 2017 542,500 Administrative expenses 246,100 Cost of goods sold 894,100 Rent revenue 42,300 Selling expenses 322,400 Loss on write-down of inventory 61,700 Sales Revenue 2,013,200 Shares outstanding during 2017 were 90,400.

1. Prepare a multiple-step income statement.

2. Prepare a comprehensive income statement for 2017, using the two statement format.

3. Prepare a retained earnings statement for 2017.

Answer 1

1. SKYSONG INC.

Multiple-step Income Statement

For the year end 2017

Items	Amount	Amount
Revenue:-
Sales Revenue	2,013,000
Less:- Cost of goods sold	(894,100)
Gross Profit		1,118,900
Operating Expenses:-
Selling Expenses	(322,400)
Loss on write down Inventory	(61,700)
Administrative Expenses	(246,100)
Total Operating Expenses		(630,200)
Operating Income		488,700
Non-operating Gains & Others:-
Gain on sale of equipment	97,400
Rent Revenue	42,300
Total Non-operating & Others		139,700
Income before Taxes		628,400
Less:- Income tax from continuing operations		(213,724)
Income from continuing operations		414,676
Discontinuing Operations:-
Loss on discontinuing Operations,less Income tax $ 28,186		(54,714)
Net Income		359,962

2. SKYSONG INC.

Comprehensive Income Statement

For the year 2017

Items	Amount
Net Income	359,962
Other Comprehensive Income:-
Unrealized holding gain on available-to-sale securities	23,100
Comprehensive Income	383,062

3. SKYSONG INC.

Retained Earnings

For the year, 2017

Items	Amount
Retained Earnings, January 1,2017	542,500
Add:- Comprehensive Income	383,062
Less:- Cash Dividend	(153,000)
Retained Earnings, Ending 2017	772,562