Question

In 2017, Randa Merchandising, Inc., sold its interest in a chain of wholesale outlets, taking the company completely out of the wholesaling business. The company still operates its retail outlets. A listing of the major sections of an income statement follows:

	Item		Debit			Credit
1.	Net sales				$	2,970,000
2.	Gain on state’s condemnation of company property, net of tax					275,000
3.	Cost of goods sold	$	1,515,724
4.	Income taxes expense		221,000
5.	Depreciation expense		245,000
6.	Gain on sale of wholesale business segment, net of tax					797,500
7.	Loss from operating wholesale business segment, net of tax		480,000
8.	Loss of assets from meteor strike, net of tax		680,000

Prepare the income statement for calendar year 2017. (Loss amounts should be indicated with a minus sign.)

Answer 1