Question

The following information is related to Kingbird Company for 2017.

Retained earnings balance, January 1, 2017		$981,000
Sales Revenue		26,100,000
Cost of goods sold		16,100,000
Interest revenue		71,000
Selling and administrative expenses		4,710,000
Write-off of goodwill		821,000
Income taxes for 2017		1,254,000
Gain on the sale of investments		111,000
Loss due to flood damage		391,000
Loss on the disposition of the wholesale division (net of tax)		441,000
Loss on operations of the wholesale division (net of tax)		91,000
Dividends declared on common stock		251,000
Dividends declared on preferred stock		81,000

Kingbird Company decided to discontinue its entire wholesale operations (considered a discontinued operation) and to retain its manufacturing operations. On September 15, Kingbird sold the wholesale operations to Rogers Company. During 2017, there were 490,000 shares of common stock outstanding all year.

Part 1

Prepare a multiple-step income statement. (Round earnings per share to 2 decimal places, e.g. 1.49.)

Part 2

Prepare a retained earnings statement. (List items that increase retained earnings first.)

Answer 1