Question

PREPARE A MULTI-STEP INCOME STATEMENT AND RETAINED EARNINGS STATEMENT

The following information is related to Coronado Company for 2020.

Retained earnings balance, January 1, 2020 $1,097,600

Sales Revenue 28,000,000

Cost of goods sold 17,920,000

Interest revenue 78,400

Selling and administrative expenses 5,264,000

Write-off of goodwill 918,400

Income taxes for 2020 1,393,280

Gain on the sale of investments 123,200

Loss due to flood damage 436,800

Loss on the disposition of the wholesale division (net of tax) 492,800

Loss on operations of the wholesale division (net of tax) 100,800

Dividends declared on common stock 280,000

Dividends declared on preferred stock 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

Multi Step- Income Statement for the year ended December 31.
Particulars	Amount $	Amount $
Sales Revenue	28,000,000.00
Less: returns and allowances
Less: Discount
Net Sales		28,000,000.00
Cost of goods sold		17,920,000.00
Gross Profit		10,080,000.00
Selling & Administrative Expense	5,264,000.00
Administrative & General Expense
Operating Expense		5,264,000.00
Operating Income		4,816,000.00
Interest revenue	78,400.00
Write-off of goodwill	918,400.00
Gain on the sale of investments	123,200.00
Loss due to flood damage	436,800.00
Other expense and income		1,556,800.00
Income from continuing operations before tax		6,372,800.00
Tax expense		1,393,280.00
Income from continuing operations after tax		4,979,520.00
Less: Loss from discontinued operations
Loss on the disposition of the wholesale division (net of tax)	492,800.00
Loss on operations of the wholesale division (net of tax)	100,800.00
Loss from discontinued operations		593,600.00
Net Income		4,385,920.00
Less: Dividends declared on preferred stock		89,600.00
Net Income available for common stockholder's		4,296,320.00
Number of shares outstanding		500,000.00
Earnings per share		8.59
Statement of Retailed Earnings		Amount $
Retailed Earnings- Opening Balance		1,097,600.00
Add: Net Income		4,385,920.00
Less: Dividends declared on preferred stock		89,600.00
Less: Dividends declared on Common stock		280,000.00
Retailed Earnings- Closing Balance		5,113,920.00