Question

Problem 4-01 The following information is related to Coronado Company for 2020. Retained earnings balance, January 1, 2020 Sales Revenue Cost of goods sold Interest revenue Selling and administrative expenses Write-off of goodwill Income taxes for 2020 Gain on the sale of investments Loss due to flood damage Loss on the disposition of the wholesale division (net of tax) Loss on operations of the wholesale division (net of tax) Dividends declared on common stock Dividends declared on preferred stock $1,097,600 28,000,000 17,920,000 78,400 5,264,000 918,400 1,393,280 123,200 436,800 492,800 100,800 280,000 89,600 Coronado Company decided to discontinue its entire wholesale operations (considered a discontinued operation) and to retain its manufacturing operations. On September 15, Coronado sold the wholesale operations to Rogers Company. During 2020, there were 500,000 shares of common stock outstanding all year.

Answer 1

Income statement Particulars Amount Amount Sales revenue $ 2,80,00,000.00 Cost of goods sold $ 1,79,20,000.00 Gross profit $ 1,00,80,000.00 Selling and administrative expenses $ 52,64,000.00 Income from operations $ 48,16,000.00 Other revenues and gains Interest revenue $ 78,400.00 Gain on sale of investments $ 1,23,200.00 $ 2,01,600.00 $ 50,17,600.00 Other expenses and losses Write-off of goodwill $ 9,18,400.00 Income before taxes and extraordinary items $ 40,99,200.00 Income taxes $ 13,93,280.00 Income from continuing operation $ 27,05,920.00 Discontinued operations Loss on the disposition of the wholesale division (net of tax) | $ 4,92,800.00 Loss on the operations of the wholesale division (net of tax) | $ 1,00,800.00 $ 5,93,600.00 Income before extraordinary item $ 21,12,320.00 Extraordinary item Loss due to flood damage $ 4,36,800.00 Net income $ 16,75,520.00 Retained earnings statement Amount Amount $ 10,97,600.00 $ 16,75,520.00 Particulars Retained earnings, January 1 Add: Net income Less: Dividends preferred stock Dividends common stock $-2,80,000.00 $ -89,600.00 $ $ 3,69,600.00 24,03,520.00 Retained earnings, December 31