Question

Amco Corporation for the year ended December 31, 2017. Amco is a coffee company and has decided to discontinue its entire manugacturing division and retain its retail operations. Prepare a multi-step income statement and classified balance sheet in proper form. Also, Give me the earnings per share for Income from Continuting operations and loss from discontinued operations. How many shares are used for the calculations
	Debit	Credit
Accounts Payable		70,000
Accounts Receivable	60,000
Accumulated Depreciation		170,000
Administrative Expense	100,000
Allowance for Doubtful Accounts		10,000
Building	250,000
Cash	120,000
Common Stock		160,000
Copyrights	90,000
Cost of Goods Sold	360,000
Equipment	120,000
Gain on Sale of Equipment	-	30,000
Income Taxes Payable
Interest Expense	20,000
Interest Revenue	-	10,000
Inventory	80,000
Investments	200,000
Land	100,000
Long Term Debt		200,000
Loss from Hurricane	40,000
Loss on disposition of manufacturing division	80,000
Loss on litigation	300,000
Loss on the operations of the manufacturing division	120,000
Note Payable due in 6 months		40,000
Preferred Stock		50,000
Prepaid Insurance	10,000
Restructuring Costs	60,000
Retained Earnings		260,000
Sales Revenue		1,200,000
Selling Expense	80,000
Short Term Investment	50,000
Unearned Revenue		10,000
Wages Payable		30,000
	2,240,000	2,240,000
Additional Information-disclose as required
1) Common Stock 120,000 shares are authorized and issued, 100,000 shares outstanding.
2) Preferred stock 20,000 shares authorized, issued and outstanding
3) Long-term debt is payable in four equal installments starting in December 2018 and Interest is paid at a rate of 5%
4) Straight-line method is used for the building depreciation, double declining is used for the equipment
5) Amco is holding $60,000 of land as an investment to be sold in 2018
6) Inventories are valued using FIFO
7) All intangible assets are stated net of amortization
9) No taxes have been accrued. Amco;s rate is 40%
10)The Loss from hurricane was determined to be unusual and infrequent

Answer 1

Amco Corporation

Income statement

The year ending December, 31 2017

Particulars	Amount $	Amount $
Sales Revenue	12,00,000
Add: Inventory	80,000
Add: Unearned Revenue	10,000
Less: Cost of Goods Sold	(3,60,000)
Gross Profit		9,30,000
Operating Expenses
1. Administrative expense	1,00,000
2. Allowance for doubtful accounts	10,000
3. Wages Payable	30,000
4. Selling Expense	80,000
Total Operating Expenses		(2,20,000)
Operating Income		7,10,000
Other Expense/Revenue
Interest Income	10,000
Interest Expense	(20,000)
Gain on sale of Equipment	30,000
Income Before Tax		20,000
Income Tax Payable	8,000	(8,000)
Income Before Extraordinary Items		7,22,000
Extraordinary Items
Loss on disposition of manufacturing division	80,000
Loss on Litigation	3,00,000
Loss on Operation of Manufacturing Division	1,20,000
Loss From Hurricane	40,000
Restructuring Cost	60,000
		(6,00,000)
Net Income		1,22,000

Amco Corporation

Balance sheet

The year ending December, 31 2017

Particulars	Amount $	Amount $
Current Assets
Account Receivable	60,000.00
Less; Allowance for doubtful Accounts	10,000.00
	50,000.00
Cash	1,20,000.00
Inventory	80,000.00
Prepaid Insurance	10,000.00
Unearned Revenue	10,000.00
Total Current Assets		2,70,000.00
Intangible Assets
Copyright		90,000.00
Investment		2,00,000.00
Short Term Investment		50,000.00
Non-Current Assets
Building	2,50,000.00
Equipment	1,20,000.00
Land	1,00,000.00
Total Gross Block	4,70,000.00
Less: Accumulated Depreciation	1,70,000.00
Total Non-Current Assets		3,00,000.00
Total Assets		9,10,000.00
Current Liabilities
Account Payable	70,000.00
Tax Payable	8,000.00
Note Payable due in 6 Months	40,000.00
Total Current Liabilities		1,18,000.00
Long Term Debt		2,00,000.00
Shareholder's Equity
Common Stock	1,60,000.00
Add: Net Income	1,22,000.00
		2,82,000.00
Preferred Stock		50,000.00
Retained Earning		2,60,000.00
Total Liability		9,10,000.00