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The Huff Company presents the following partial list of account balances taken from its December 31,...

The Huff Company presents the following partial list of account balances taken from its December 31, 2016 adjusted trial balance:

Sales (net) $125000 Operating expenses $26100
Interest expense 4600 Common stock, $5 par 11000
Cost of goods sold 59000 Retained earnings, 1/1/2016 43000

The following information is also available for 2016 and is not reflected in the preceding accounts:

The common stock has been outstanding all year. A cash dividend of $1.16 per share was declared and paid.

Land was sold at a pretax gain of $6700.

Division X (a major component of the company) was sold at a pretax gain of $4620. It had incurred a $9460 pretax operating loss during 2016.

A tornado, which is an unusual event in the area, caused a $5330 pretax loss.

The income tax rate on all items of income is 30%.

The average shareholders’ equity is $90000.

Required:

1. Prepare a 2016 multiple-step income statement for Huff. Round earnings per share computations to two decimal places.

2. Prepare a 2016 retained earnings statement.

3. Compute the 2016 return on common equity. Round to one decimal place.

Solutions

Expert Solution

ekkarill92 answered 1 year ago
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