Question

The following information was taken from the records of Metlock Inc. for the year 2020: Income tax applicable to income from continuing operations $183,260; income tax applicable to loss on discontinued operations $24,990, and unrealized holding gain on available-for-sale securities (net of tax) $14,700.

Gain on sale of equipment		$93,100		Cash dividends declared		$147,000
Loss on discontinued operations		73,500		Retained earnings January 1, 2020		1,560,000
Administrative expenses		235,200		Cost of goods sold		833,000
Rent revenue		39,200		Selling expenses		294,000
Loss on write-down of inventory		58,800		Sales Revenue		1,862,000

Shares outstanding during 2020 were 100,000.

Prepare a comprehensive income statement for 2020, using the two statement format. METLOCK INC. Comprehensive Income Statement $ $ e Textbook and Media List of Accounts Prepare a retained earnings statement for 2020. (List items that increase retained earnings first.) METLOCK INC. Retained Earnings Statement $ $ e Textbook and Media Assistance Used List of Accounts Assistance Used

Answer 1

Metlock Inc.
Income statement
For the Year Ended Dec 31, 2020
Revenues
Sales		$     1,862,000
Rent revenue		$           39,200
Total revenues			$       1,901,200
Expenses
Cost of goods sold		$         833,000
Selling expenses		$         294,000
Administrative expenses		$         235,200
Total expenses			$       1,362,200
Income from operations			$          539,000
Other Revenues and Gains
Gain on sale of equipment			$             93,100
Other expense and losses
Inventory loss written down (less)			$             58,800
Income from continuing operation before income tax			$          573,300
Income tax applicable to income from continuing operations			$          183,260
Income from continuing operations			$          390,040
Discontinued operations
Loss on discontinued operations		$           73,500
Less: Applicable income tax reduction		$           24,990	$             48,510
Net income			$          341,530
Per share of common stock:
Income from continuing operations (390040/100000)			$                 3.90
Loss on discontinued operations, net of tax (48510/100000)			$               (0.49)
Net income			$                 3.42
Metlock Inc.
COMPREHENSIVE INCOME STATEMENT
For the Year Ended Dec 31, 2020
Net income			$          341,530
Other comprehensive income
Unrealized holding gain, net of tax			$             14,700
Comprehensive income			$          356,230
Metlock Inc.
Retained earnings
For the Year Ended Dec 31, 2020
Retained earnings, Jan 1, 2020			$       1,560,000
Add: Net income			$          341,530
			$       1,901,530
Less: Dividends declared			$          147,000
Retained earnings, Dec 31, 2020			$       1,754,530