Question

The following information is related to Stellar Company for 2017. Retained earnings balance, January 1, 2017 $993,230 Sales Revenue 26,284,300 Cost of goods sold 16,139,200 Interest revenue 79,400 Selling and administrative expenses 4,749,600 Write-off of goodwill 824,400 Income taxes for 2017 1,303,600 Gain on the sale of investments 119,300 Loss due to flood damage 397,000 Loss on the disposition of the wholesale division (net of tax) 451,900 Loss on operations of the wholesale division (net of tax) 88,730 Dividends declared on common stock 264,100 Dividends declared on preferred stock 87,850 Stellar Company decided to discontinue its entire wholesale operations (considered a discontinued operation) and to retain its manufacturing operations. On September 15, Stellar sold the wholesale operations to Rogers Company. During 2017, there were 492,800 shares of common stock outstanding all year. Prepare a multiple-step income statement. (Round earnings per share to 2 decimal places, e.g. 1.49.) STELLAR COMPANY Income Statement $ $ $ : $ $ $ SHOW LIST OF ACCOUNTS Prepare a retained earnings statement. (List items that increase retained earnings first.) STELLAR COMPANY Retained Earnings Statement $ : : $ $ Click if you would like to Show Work for this question: Open Show Work SHOW LIST OF ACCOUNTS Question Attempts: 0 of 3 used SAVE FOR LATER SUBMIT ANSWER

Answer 1

	Multiple- Step Income Statement
	STELLAR COMPANY
	INCOME STATEMENT
	FOR THE YEAR ENDED DECEMBER 31, 2017
	Sales Revenue				$26,284,300
	Cost of Goods Sold				$16,139,200
	Gross Profit				$10,145,100
	Operating Expenses
	Selling and Administrative Expenses				$4,749,600
	Income From Operations				$5,395,500
	Other Revenue and Gains
	Interest Revenue			$79,400
	Gain on Sale of Investments			$119,300	$198,700
	Other Expenses and Losses
	Write off of Goodwill				$824,400
	Income before taxes and extraordinary items				$4,769,800
	Income Taxes				$1,303,600
	Income from Continuing Operations				$3,466,200
	Discountinued Operations
	Loss on operations, net of tax			$88,730
	Loss on Disposition, net of tax			$451,900	$540,630
	Income before extraordinary items				$2,925,570
	Extraordinary item - Loss due to flood damage				$397,000
	Net Income				$2,528,570
	Earnings per share
	Income from continuing operations
	($3466200-$87850)/492800				6.86	3378350
	Discountinued operations
	Loss on operations, net of tax		$88730/492800	($0.18)
	Loss on Disposition, net of tax		$451900/492800	($0.92)	($1.10)
	Income before extraordinary item				$5.76
	($2925570-$87850)/492800
	Extraordinary loss		$397000/492800		($0.81)
	Net Income ($2528570-$87850)/492800				$4.95
	STELLAR COMPANY
	RETAINED EARNINGS STATEMENT
	FOR THE YEAR ENDED DECEMBER 31, 2017
	Retained Earnings, January 1				$993,230
	Add : Net Income				$2,528,570
	Less : Dividends
	Preferred Stock			$87,850
	Common Stock			$264,100	$351,950
	Retained Earnings, December 31				$2,176,620