Question

Please Provide the Answers and Solution for this Question Clearly:

. Presented below is information related to Dublin Company for 2018.

Unrealized gain on non-trading equity securities, net of tax	€200,000
Retained earnings balance, January 1, 2018	1,200,000
Sales revenue	35,000,000
Unearned sales revenue	150,000
Prepaid expense	80,000
Freight-In	10,000
Cost of goods sold	25,000,000
Purchase Discounts	15,000
Interest expense	100,000
Selling and administrative expenses	5,700,000
Write-off of goodwill	1,200,000
Income taxes for 2018	1,360,000
Dividend revenue	100,000
Gain on the disposition and operations of the wholesale division (Gain before income tax)	400,000
Loss due to flood damage	300,000
Gain on the sale of investments	200,000
Dividends declared on ordinary shares	250,000
Allocation to non-controlling interest	30,000

Required:

Prepare an (1) income statement and (2) a retained earnings statement. Dublin Company decided to discontinue its entire wholesale operations and to retain its manufacturing operations. On August 10, Dublin sold the wholesale operations to Rene Company. During 2018, there were 400,000 ordinary shares outstanding all year.

Answer 1

1. Income Statement -

Income statement	Amount	Amount
Sales Revenue		€   35,000,000
Cost of goods sold	€ 25,000,000
Add - Freight-In	€        (10,000)
Less - Purchase Discount	€         15,000	€ (25,005,000)
Gross Profit		€     9,995,000
Operating Expenses
Selling and administrative expenses		€    (5,700,000)
Operating Income		€     4,295,000
Non - Operating Income (Expenses)
Interest expense	€      (100,000)
Write-off of goodwill	€   (1,200,000)
Dividend revenue	€       100,000
Gain on the sale of investments	€       200,000
Total Non - Operating Income/ (Expenses)		€    (1,000,000)
Income from Continuing Operation before Taxes		€     3,295,000
Income taxes for 2018		€    (1,360,000)
Income from Continuing Operation		€     1,935,000
Income from Discontinuing Operation
Gain on the disposition and operations of the wholesale division (Gain before income tax)		€        400,000
Income Tax on Discontined Operation		€       (165,099)
		€        234,901
Income before Extraordinary Items		€          2,169,901
Extraordinary Items -
Loss due to flood damage		€       (300,000)
Net Income		€          1,869,901
Consolidated Net Income		€          1,839,901
Allocation to non-controlling interest		€                30,000

2. Retained Earnings -

Retained Earnings
Particulars	Amount
Retained Earnings (Opening)	€ 1,200,000
Less -
Dividends declared on ordinary shares	€   (250,000)
Add -
Net Income	€ 1,839,901
Retained Earnings (Closing)	€ 2,789,901