Question

The following information was taken from the records of Cheyenne Inc. for the year 2017: Income tax applicable to income from continuing operations $177,616; income tax applicable to loss on discontinued operations $28,866, and unrealized holding gain on available-for-sale securities (net of tax) $22,100. Gain on sale of equipment $99,000 Cash dividends declared $152,500 Loss on discontinued operations 84,900 Retained earnings January 1, 2017 554,900 Administrative expenses 244,000 Cost of goods sold 770,600 Rent revenue 49,300 Selling expenses 292,100 Loss on write-down of inventory 66,200 Sales Revenue 1,747,000 Shares outstanding during 2017 were 93,500.

Answer 1

Income Statement

Particulars	Amount	Amount
Sales Revenue		$1,747,000
Cost Of Goods Sold		$770,600
Gross Profit		$976,400
Other Revenues
Rent Revenue		$49,300
Other expenses
Selling expenses	$292,100
Administrative expenses	$244,000
Total Other expenses		($536,100)
Income from continuing operations before inome tax		$489,600
Income Tax		($177,616)
Income from continuing operations		$311,984
Discontinued Operations
Loss on discontinued operations	($28,866)
Applicable tac reduction @36% ($177,616/$489,600)($28,866*36%)	$10,392	($18,474)
Income from discontinued operations		$293,510
Extraordinary Items
Gain on sale of equipment	$99,000
Income tax on sale of equipment @36%	($35,640)	$63,360
Loss on written down of inventory	($66,200)
Income tax applicable @ 36%	$23,832	($42,368)
Net Income		$314,502

Comprehensive Income Statement
Particulars	Amount
Net Income	$314,502
Comprehensive inocme
Unrealized hlding gain sale of securities	$22,100
Total Comprehensive Income	$336,602

Retained Earnings Statement
Particulars	Amount
Opening balance of retained earnings	$554,900
Add: Net Income	$314,502
Less: Dividends Declared	($152,500)
Retained earnings closing balance	$716,902

Outstanding shares = 93,500

Earnings per share = $314,502 / 93,500 = $3.36