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 3 years ago
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