Question

PROBLEMS P4-1 (L03,4,6) (Multiple-Step Statement, Retained Earnings Statement) The following information is related to Dickin- son Company for 2017. Retained earnings balance, January 1, 2017 Sales revenue Cost of goods sold Interest revenue Selling and administrative expenses Write-off of goodwill Income taxes for 2017 Gain on the sale of investments Loss due to flood damage Loss on the disposition of the wholesale division (net of tax) Loss on operations of the wholesale division (net of tax) 16,000,000 70,000 820,000 1,244,000 110,000 390,000 440,000 90,000

Answer 1

DICKINSON COMPANY INCOME STATEMENT For the Year Ended 2017 Sales Revenue Cost of Goods sold Gross Profit Selling and administrative expenses Income from operations Other revenues and gains 25000000 4700000 4300000 Interest Revenue 70000 Gain on sale of Investment 110000 180000 Other expenses and losses Write off of goodwill Income from continuing operations before Income Taxes 820000 820000 3660000 1244000 2416000 Income Taxes Income from continuing operations Discontinued operations Loss on operations, net of tax 90000 Loss on disposal, net of tax Income before extraordinary item Extraordinary item- loss from flood damage- net of tax Net Income 440000 530000 1886000 390000 1496000

Retained Earnings Statement Retained Earnings, January 1, 2017 Add: net income 980000 1496000 2476000 Less: dividends Preferred Stock Common Stock 80000 250000 330000 Retained Earnings, december 31, 2017 2146000 Earnings per share: Income from continuing operations Discontinued operations Loss on operations, net of tax Loss on disposal, net of tax Income before extraordinary item Extraordinary item- loss from flood damage- net of tax Net Income 4.67 - (2416000 80000)/500000 0.18 0.88 1.06 3.61 0.78 2.83 - (1886000 80000)/500000 - (1496000 80000)/500000