Question

The following pretax amounts are taken from the accounts of J&J Inc. at December 31, 2020, its annual year-end ($thousands). Assume an average 25% tax rate on all items. Sales revenue $340,000 Cost of goods sold 170,000 Selling and administrative expenses 90,000 Gain on sale of land held for speculation 30,000 Prior period adjustment, correction of error from 2019.pretax (a debit) 16,000 Interest expense 2,000 Cash dividends declared and paid 5,000 Retained earnings, December 31, 2019 103,000 Common stock, outstanding 10,000 shares Required a. Prepare a multiple-step income statement, including intraperiod income tax allocation and EPS disclosure. • Do not use negative signs with any of your answers. • Round the per share amount to two decimal places J&J Inc. Income Statement For the Year Ended December 31, 2020 e Other revenues and gains Other expenses and losses $ Earnings per share $ b. Determine the December 31, 2020, balance in retained earnings. $

Answer 1

Income Statement Sale 3uoouo COGS 17 cour Gooss Profit (A) 17 000 Opercting Expenses, Selling & Administctive Expense 9ooou Total operating Expense (B) 90000 Opercting Income (A-B) دین Non opercting or other :- 2ooo land Interest Expense Gain on Scle of held for Specultim Priod benod Adjustment 3oooo I boud Net Income Beyore Tax Tax Expense e 25% 32000 Pooo Net Income 894000

Earning Per Shane : Net Income outstandin shares - 2uoue lous N 2.4

Retained Earning Ale Amt Amt Carn Dividend 5000 Opening Balance 1o3oou Paid Income Econd 24000 During the year closing Belance 122000 1 27oou 1270 Balance in Retained Earning 28122000 cn 31 Dec 2020

ncome Statement Sale 3 uoouu 17 cour COGS Gooss Profit (A) 17oou Operating Expenser - Selling & Administchine 9oooo Expense qouu Total operating Expense (B) Opercting Income (A-B) 8ooud Non opereting or other :- 2ooo Interest Expense Gain on Scle of land held for Speculation Porod besiol Adjustment 3oouo I boud 32000 Net Income Before Tax Tax Expense e 25% gooo Net Income 3 Quouo