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PRACTICE PROBLEM Utilizing the following information, prepare a multi-step income statement (with basic EPS) for Waterway...

PRACTICE PROBLEM

Utilizing the following information, prepare a multi-step income statement (with basic EPS) for Waterway Company, a manufacturing company, for 2017. The company’s income tax rate is 30%. There were 500,000 shares of common stock outstanding all year.

Dividends declared on preferred stock                                                                           84,100

Dividends declared on common stock                                                                           262,300

Gain on sale of investments                                                                                          111,100

Discontinued operations: loss on disposal of the wholesale division (gross)                     445,600

Discontinued operations: loss on operations of the wholesale division (gross)                   96,080

Sales revenue                                                                                                            26,211,300

Cost of goods sold                                                                                                      16,244,400

Interest revenue                                                                                                            73,900

Selling expenses                                                                                                          2,439,200

Administrative expenses                                                                                              1,450,300

Loss due to flood damage                                                                                             392,600

Rent revenue                                                                                                               520,000

Notes: If a company has an overall loss on discontinued operations, earnings per share for discontinued operations should be represented as a loss (i.e., negative). Preferred dividends are also not subtracted from the numerator when calculating earnings per share on a loss (since there is no income to distribute). Earnings per share should be rounded to the nearest cent.

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ekkarill92 answered 2 years ago
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