Question

Multiple-step income statement (show your work)

Presented below is information related to Donaldson Corp., for the year 2017.

Net sales                                                                                                   $1,950,000

Cost of goods sold                                                                                      1,200,000

Selling expenses                                                                                              95,000

Administrative expenses                                                                                  70,000

Dividend revenue                                                                                             30,000

Interest revenue                                                                                               20,000

Interest expense                                                                                              45,000

Write-off of goodwill due to impairment                                                           75,000

Depreciation expense omitted in 2015                                                          105,000

Dividends declared                                                                                        120,000

Effect on prior years of change in accounting principle (credit)                    220,000

Loss from operations of discontinued component of business                     240,000

Gain from disposal of component of business                                              300,000

Federal tax rate of 30% on all items

Instructions

Prepare a multiple-step income statement for 2017. Assume the 200,000 shares of common stock were outstanding during 2017.

Answer 1

Net sales		1,950,000
Cost of goods sold		(1,200,000)
Gross profit		750,000
Operating expenses
Selling expenses	95,000
Administrative expenses	70,000	(165,000)
Income from operations		585,000
Other revenues and gains
Dividend revenue	30,000
Interest revenue	20,000	50,000
		635,000
Other expenses and losses
Interest expense	45,000
Loss due to write-off of goodwill	75,000	(120,000)
Income before income tax		515,000
Income taxes		(154,500)
Income from continuing operations		360,500
Discontinued operations
Loss from operations of discontinued component of
business (net of $72,000 income tax effect) (240,000*70%)	(168,000)
Gain from disposal of component of business
(net of $90,000 income tax effect) (300,000*70%)	210,000	42,000
Net income		402,500
Per share of common stock:
Income from continuing operations (360,500/200,000)		1.8
Discontinued operations (42,000/200,000)		0.21
Net income (402,500/200,000)		2.01

I HOPE IT USEFUL TO YOU IF YOU HAVE ANY DOUBT PLZ COMMENT GIVE ME UP-THUMB. THANKS....