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				$	2,950,000
2.	Gain on state’s condemnation of company property, net of tax					278,000
3.	Cost of goods sold	$	1,505,517
4.	Income taxes expense		224,000
5.	Depreciation expense		232,500
6.	Gain on sale of wholesale business segment, net of tax					750,000
7.	Loss from operating wholesale business segment, net of tax		442,000
8.	Loss of assets from meteor strike, net of tax		638,000

Prepare the income statement for calendar year 2017.

Answer 1

RANDA MERCHANDISING, Inc income Statement for Year Ended December 31,2017 Net sales $ 2,950,000 Expenses: Cost of goods sold $1,505,517 Depreciation expense $ 232,500 Less: Total operating expenses $ 1,738,017 $ 1,211,983 $ (638,000) $ 278,000 $ 851,983 Zess! $ 224,000 other unusual and/or infrequent gains (losses) Loss on assets from meteor struire, net of tax Grain on state's condemnation of company property, net of tax Income from consuming operations before taxes Income taxes expense Income from continuing operations Dis continued segment ! Loss from operating wholesale business - segment (net of tax) $1442,000) Grain on sale ok wholesale business segment (het of $450, $ 627,983 $ 308,000 * 935,983 Net income Calculation : Income from consuming operations before taxes = $1,211,983 - $ 638,000 + $ 2.78,000 - & 851,983