Question

Problem 4-1 (Part Level Submission)

The following information is related to Marigold Company for 2017.

Retained earnings balance, January 1, 2017		$988,590
Sales Revenue		26,102,600
Cost of goods sold		16,294,600
Interest revenue		79,900
Selling and administrative expenses		4,770,300
Write-off of goodwill		822,300
Income taxes for 2017		1,270,500
Gain on the sale of investments		120,100
Loss due to flood damage		392,700
Loss on the disposition of the wholesale division (net of tax)		448,400
Loss on operations of the wholesale division (net of tax)		86,500
Dividends declared on common stock		239,900
Dividends declared on preferred stock		72,850

Marigold Company decided to discontinue its entire wholesale operations (considered a discontinued operation) and to retain its manufacturing operations. On September 15, Marigold sold the wholesale operations to Rogers Company. During 2017, there were 529,100 shares of common stock outstanding all year.

Prepare a multiple-step income statement. (Round earnings per share to 2 decimal places, e.g. 1.49.)

Answer 1

Marigold Company
INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 2017
Sales Revenue
Net sales		26,102,600
Cost of goods sold		16,294,600
Gross profit		9,808,000
Operating Expenses
Selling and administrative expenses		4,770,300
Income from operations		5,037,700
Other Revenues and Gains
Interest revenue	79,900
Gain on the sale of investments	120,100	200,000
		5,237,700
Other Expenses and Losses
Write-off of goodwill		822,300
Income before taxes and extraordinary items		4,415,400
Income taxes		1,270,500
Income before extraordinary items		3,144,900
Extraordinary items
Loss due to flood damage – extraordinary item	392,700
Loss on the disposition of the wholesale division	86,500
Loss on operations of the wholesale division	86,500	565,700
Net income		2,579,200
Per share of common stock
Income before extraordinary items		5.94
3144900/529100
Extraordinary loss net of tax		-1.07
565700/529100
Net income		4.87
2579200/529100