Question

Webber Corporation reported the following alphabetical items for the year ended December 31, 2019 (some of Webber's balance sheet accounts have been omitted). Accumulated Depreciation Accumulated Other Comprehensive Income Available for Sale Securities Common Stock, $10 par Cost of Goods Sold (condensed) Dividends Declared ($3,000 for Preferred and $29,000 for Common) Dividend Revenue Gain on Sale of Equipment Interest Expense Loss from Discontinued Operations Net Sales Operating Expenses (condensed) Paid in Capital in Excess of Par - Common Preferred Stock, $50 par Prior Period Adjustment (credit balance) Rent Revenue Retained Earnings on January 1, 2019 Unrealized Gain on Available for Sale Securities which are Bonds $200,000 21,000 $79,000 290,000 600,000 32,000 6,000 12,000 80,000 30,000 1,300,000 500,000 770,000 50,000 40,000 7,000 355,000 9,000 Assume that Webber was in a 24% tax rate this year and a 30% tax rate in all previous years. Assume also that Webber sold 6,000 shares of common stock on August 1 of this year (which is already included in the amounts above). INSTRUCTIONS: 1. Prepare a multiple step income statement (including EPS) for the year ended December 31, 2019, from the accounts and amounts listed above. Not all accounts will be used. 2. Prepare a retained earnings statement for the year ended December 31, 2019, from the accounts and amounts listed above. Not all accounts will be used.

Answer 1

Webber Corporation
Income Statement
For the Year Ended December, 31, 2019
Particulars	Amount
Net Sales	1300000
Cost of Goods Sold	-600000
Gross Profit	700000
operating Expenses Condensed	-500000
Profit After Deducting Operating Expense	200000
Non Operating Or others
Rent Revenue	7000
Dividend Revenue	6000
Gain on Sale of Equipment	12000
Dividend on Preferred Stock	-32000
Loss from Discontinued Operation	-30000
Interest Expense	-80000
Total of Non Operating Items	-117000
Net Profit Before Tax	83000
Tax @ 24%	19920
Net Profit after Tax	63080
Earnings for common Stock holders	63080
No. of Common Stock	29000
290000/10
EPS	2.175172414

Webber Corporation
Retained Earning Statement
For the Year Ended December, 31, 2019
Particulars	Amount
Retained Earnings on January 1, 2019	355000
Add : Profit for Current Period	63080
Add : Prior Period Adjustment in Credit balance	40000
Less: Dividend Declared in Common Stock	-29000
Balance as on december 31,2019	429080

Since sale of common stock is already included in statement above, no adjustment for the same is required