Question

The following information is related to Skysong Company for 2020.

Retained earnings balance, January 1, 2020		$1,372,000
Sales Revenue		35,000,000
Cost of goods sold		22,400,000
Interest revenue		98,000
Selling and administrative expenses		6,580,000
Write-off of goodwill		1,148,000
Income taxes for 2020		1,741,600
Gain on the sale of investments		154,000
Loss due to flood damage		546,000
Loss on the disposition of the wholesale division (net of tax)		616,000
Loss on operations of the wholesale division (net of tax)		126,000
Dividends declared on common stock		350,000
Dividends declared on preferred stock		112,000

Skysong Company decided to discontinue its entire wholesale operations (considered a discontinued operation) and to retain its manufacturing operations. On September 15, Skysong sold the wholesale operations to Rogers Company. During 2020, there were 500,000 shares of common stock outstanding all year.

Prepare a multi step income statement:

Answer 1

Income statement
sale revenue				35000000
cost of goods sold				22400000
Gross profit				12600000
selling & administrative expenses				6580000
Income from operations				6020000
Other revenue & gains
Interest revenue			98000
gain on sale of investment			154000	252000
other expenses & losses
goodwill write off				1148000
Income from continuing operation before tax				5124000
income tax				1741600
Income from continuing operation				3382400
Discontinued operation
loss on disposition net of tax			616000
loss from operation net of tax			126000	742000
Income before extraordinary items				2640400
extraordinary item
Loss from flood				546000
net income				2094400
Earning per share
income from continuing operation (3382400-112000)/500000					6.54
loss on operation (126000/500000)					-0.25
Loss on disposition     (616000/500000)					-1.23
income before extraordinary items					5.06
extraordinary items (546000/500000)					-1.09
net income   (2094400-112000)/500000					3.97