Question

The following information is related to Pronghorn Company for 2017. Retained earnings balance, January 1, 2017 $985,470 Sales Revenue 26,100,500 Cost of goods sold 16,248,000 Interest revenue 76,300 Selling and administrative expenses 4,796,300 Write-off of goodwill 839,700 Income taxes for 2017 1,349,100 Gain on the sale of investments 115,500 Loss due to flood damage 398,800 Loss on the disposition of the wholesale division (net of tax) 451,200 Loss on operations of the wholesale division (net of tax) 91,620 Dividends declared on common stock 242,600 Dividends declared on preferred stock 85,750 Pronghorn Company decided to discontinue its entire wholesale operations (considered a discontinued operation) and to retain its manufacturing operations. On September 15, Pronghorn sold the wholesale operations to Rogers Company. During 2017, there were 457,500 shares of common stock outstanding all year. Prepare a multiple-step income statement.

Answer 1

Solution:

Pronghorn Company
Income Statement for the year End 31st Dec-2017
Particulars	Amount	Amount
Sales Revenue
Net Sales		$ 2,61,00,500
Less:Cost of Goods Sold		$ 1,62,48,000
Gross Profit		$    98,52,500
Operating Expenses
Selling and Administratinve Expenses		$    47,96,300
Income from Operations		$    50,56,200
Add:Other Revenues and gains
Interest revenue	$    76,300
Gain on Sale of Investments	$ 1,15,500	$       1,91,800
		$    52,48,000
Less:Other Expenses and Losses
Writte Off Goodwill		$       8,39,700
Income Before Taxes and Extroadinary Items		$    44,08,300
Income Taxes		$    13,49,100
Income Before Extroadinary Items		$    30,59,200
Loss Due to Flood Damage - Extraordinary Items	$ 3,98,800
Loss on the Disposition of Wholesale Division	$ 4,51,200
Loss on Operation of the Wholesale division	$    91,620	$       9,41,620
Net Income		$    21,17,580

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