Question

Presented below is information related to Meister Company for the 2019 year-end. Retained earings balance, January 1, 2019 Sales revenue Cost of goods sold Interest revenue Selling expenses General and administrative expenses Write-off of goodwill Loss on the sale of equipment Interest expense Loss due to hurricane damage in New York (Gross) Gain on the disposition of the retail division (Gross) Loss on operations of the retail division (Gross) Dividends declared on common stock Dividends declared on preferred stock Loss due to frost damage in New Mexico (Gross) Overstatement of Bad Debts (Gross) - Prior Year Unrealized Losses on Available for Sale Securities Translation gains on FX Currency 3,200,000 57,500,000 34,500,000 220,000 450,000 4,500,000 1,600,000 75,000 290,000 600,000 1,200,000 700,000 420,000 520,000 200,000 150,000 1,450,000 250,000 Instructions Prepare: 1) A Multiple-Step Income Statement for Meister Company at the end of the year. During 2019, there were 800,000 shares of common stock outstanding all year. Assume a Tax Rate of 20% 2) Statement of Retained Earnings 3) Statement of Comprehensive Income

Answer 1

1.)
MEISTER COMPANY
Multiple Step Income Statement
for the year ended 2019
Sales revenue			$57,500,000
Cost of goods sold			($34,500,000)
	Gross profit		$23,000,000
Operating expenses
	Selling expenses	$450,000
	General and administrative expenses	$4,500,000
Total operating expenses			$4,950,000
	Operating income		$18,050,000
Non-operating and other
	Interest revenue	$220,000
	Write-off of goodwill	$1,600,000
	Loss on sale of equipment	($75,000)
	Interest expense	($290,000)
	Loss due to hurricane damage in New York	($600,000)
	Gain on disposition of the retails division	$1,200,000
	Loss on operations of retails division	($700,000)
	Loss due to damage in New Mexico	($200,000)
	Overstatement of Bad Debts - Prior Year	$150,000
	Unrealized loss on available for sale securities	($1,450,000)
	Translation gains on FX currency	$250,000
Total Non-operating and other income/(loss)			$105,000
	Net income		$18,155,000
	Tax @ 20 %		$3,631,000
Net income transferred to retained earnings			$14,524,000
	Dividends declared on preferred stock		($520,000)
	Income available to common stockholders		$14,004,000
	Number of common stocks outstanding		800,000
	Earnings per share		$17.51
2.)
MEISTER COMPANY
Statement of Retained Earnings
for the year ended 2019
Beginning balance , January 1,2019			$3,200,000
	Net income for the year		$14,524,000
	Dividends declared on preferred stock		($520,000)
	Dividends declared on common stock		($420,000)
Ending balance , December 31,2019			$16,784,000
3.)
MEISTER COMPANY
Statement of Comprehensive Income
for the year ended 2019
Sales revenue			$57,500,000
Cost of goods sold			($34,500,000)
	Gross profit		$23,000,000
Operating expenses
	Selling expenses	$450,000
	General and administrative expenses	$4,500,000
Total operating expenses			$4,950,000
	Operating income		$18,050,000
Discontinued operations
	Gain on disposition of the retails division	$1,200,000
	Loss on operations of retails division	($700,000)
	Gain on discontinued operations		$500,000
Extraordinary items
	Interest revenue	$220,000
	Write-off of goodwill	$1,600,000
	Loss on sale of equipment	($75,000)
	Interest expense	($290,000)
	Loss due to hurricane damage in New York	($600,000)
	Loss due to damage in New Mexico	($200,000)
	Overstatement of Bad Debts - Prior Year	$150,000
	Extraordinary gains		$805,000
Net income			$19,355,000
Other comprehensive income adjustments
	Unrealized loss on available for sale securities		($1,450,000)
	Translation gains on FX currency		$250,000
Comprehensive income			$18,155,000
	Tax @ 20 %		$3,631,000
Net income transferred to retained earnings			$14,524,000
	Dividends declared on preferred stock		($520,000)
	Income available to common stockholders		$14,004,000
	Number of common stocks outstanding		800,000
	Earnings per share		$17.51