Question
In: Accounting
The following information was taken from the records of Raiders Inc. for the year 2017. Income...
The following information was taken from the records of Raiders Inc. for the year 2017. Income tax applicable to income from continuing operations $260,000; income tax applicable to loss on discontinued operations $36,000; income tax applicable to unusual gain $45,000; income tax applicable to unusual loss $28,000. There is also unrealized holding gain on available-for-sale securities $20,000.
| Unusual gain $145,000 | Cash dividends declared $200,000 |
| Loss on discounted operations $115,000 | Retained earnings January 1, 2017 $850,000 |
| Administrative expenses $336,000 | Cost of goods sold $1,200,000 |
| Rent Revenue $60,000 | Selling expenses $430,000 |
| Unusual loss $90,000 | Sales $2,700,000 |
| Shares outstanding during 2017 were 200,000. |
Instructions:
(a). Prepare multiple-step income statement for 2017.
(b). Prepare retained earnings statement for 2017.
(c). Show how comprehensive income is reported using the two statement format.
Solutions
Expert Solution
| (a) Raiders INC. | ||
| Income Statement | ||
| For the Year Ended December 31, 2017 | ||
| Revenues | ||
| Sales revenue | $27,00,000.00 | |
| Rent revenue | $60,000.00 | |
| Total revenues | $27,60,000.00 | |
| Expenses | ||
| Cost of goods sold | $12,00,000.00 | |
| Selling expenses | $4,30,000.00 | |
| Administrative expenses | $3,36,000.00 | |
| Total expenses | $19,66,000.00 | |
| Income from operations | $7,94,000.00 | |
| Add: Other revenues and gains | ||
| Unusal Gain | $1,45,000.00 | |
| Les: Other expenses and losses | ||
| Unusual Loss | $90,000.00 | |
| ncome before continuing operations | $8,49,000.00 | |
| Less:income tax | $2,60,000.00 | |
| Income from continuing operaions | $5,89,000.00 | |
| Discontinued operations | ||
| Loss on discontinued operations | -$1,15,000.00 | |
| Less: Applicable income tax reduction | $36,000.00 | -$79,000.00 |
| Net income | $5,10,000.00 | |
| Per share common stock | ||
| Income from continuing operation [589000/200000] | $2.95 | |
| Loss on discontinued operations, net of tax [-79000/200000] | -$0.40 | |
| net income [510000/200000] | $2.55 | |
| (b) Raiders INC. | ||
| Retained Earning Statement | ||
| For the Year Ended December 31, 2017 | ||
| Retained Earning , Jan 01 | $8,50,000.00 | |
| Add: Net Income | $5,10,000.00 | |
| Less: Dividend Declared | $2,00,000.00 | |
| Retained Earning, Dec 31 | $11,60,000.00 | |
| (c) Raiders INC. | ||
| Comprehensive Income Statement | ||
| For the Year Ended December 31, 2017 | ||
| Net Income | $5,10,000.00 | |
| Other Comprehensive Income | ||
| Unrealized Holding Gain/loss | $20,000.00 | |
| Comprehensive Income | $5,30,000.00 | |
ekkarill92 answered 2 years agoRelated Solutions
The following information was taken from the records of Raiders Inc. for the year 2017. Income...
The following information was taken from the records of Raiders
Inc. for the year 2017. Income tax applicable to income from
continuing operations $260,000; income tax applicable to loss on
discontinued operations $36,000; income tax applicable to unusual
gain $45,000; income tax applicable to unusual loss $28,000. There
is also unrealized holding gain on available-for-sale securities
$20,000.
Unusual gain $145,000
Cash dividends declared $200,000
Loss on discounted operations $115,000
Retained earnings January 1, 2017 $850,000
Administrative expenses $336,000
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Loss on discontinued operations
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