Question

The following information is available for Teal Mountain Inc. for the year ended December 31, 2017:

Loss on discontinued operations		$81,000		Retained earnings January 1, 2017		$1,280,000
Rent revenue		95,000		Selling expenses		877,000
Income tax applicable to continuing operations		299,000		Income tax applicable to loss on discontinued operations		27,000
Administrative expenses		502,000		Cost of goods sold		1,628,000
Loss on write-down of inventory		41,000		Sales revenue		3,755,000
Gain on sale of equipment		40,000		Cash dividends declared		216,000
Unrealized gain on available-for-sale securities		35,000		Interest expense		64,000

200,000 shares were outstanding during all of 2017.

Question 1 -Prepare a multiple-step income statement. and Per share of common stock  (Round earnings per share to 2 decimal places,

Question 2-Prepare a comprehensive income statement for 2017.

Question 3-Prepare a retained earnings statement for 2017. (List items that increase retained earnings first

Answer 1

Multiple - Step Income Statement
Sales Revenue		$ 3,755,000
Cost og goods sold		$ 1,628,000
Gross profit		$ 2,127,000
Operating expenses
Selling expenses	$       877,000
Administrative expenses	$       502,000	$ 1,379,000
Income from operations		$     748,000
Other revenues and gains
Rent revenue	$         95,000
Gain on sale of equipment	$         40,000	$     135,000
Other expenses and losses
Interest expense	$         64,000
Inventory loss	$         41,000	$     105,000
Income from continuing operations before Income tax		$     778,000
Income tax		$     299,000
Income from continuing operations		$     479,000
Discontinued Operations
Loss on discontinued operations	$         81,000
Less: Income tax reduction	$         27,000	$     (54,000)
Net Income		$     425,000
Per share of common stock
Income from continuing operations	2.40
Loss on discontinued operations	-0.27
Net Income [425000/200000]	2.13

Teal Mountain Inc.
Comprehensive Income Statement
For the year ended December 31, 2017
Net Income	$       425,000
Other Comprehensive Income
Unrealised holding gain on AFS securities	$         35,000
Comprehensive Income	$       460,000
Teal Mountain Inc.
Comprehensive Income Statement
For the year ended December 31, 2017
Retained Earnings - January 1	$   1,280,000
Add: Net Income	$       425,000
	$   1,705,000
Less: Dividends Declared	$       216,000
Retained Earnings - December 31	$   1,489,000