Been have trouble with this problem, please help... (a) Prepare a multiple-step

ID: 2416581 • Letter: B

Question

Been have trouble with this problem, please help...

(a)

Prepare a multiple-step income statement for 2014. Assume that 59,600 shares of common stock are outstanding. (Round earnings per share to 2 decimal places, e.g. 1.49.)

Presented below is information related to Ivan Calderon Corp. for the year 2014.
Net sales $1,390,000 Write-off of inventory due to obsolescence $82,100 Cost of goods sold 781,500 Depreciation expense omitted by accident in 2013 47,600 Selling expenses 65,700 Casualty loss (extraordinary item) before taxes 58,300 Administrative expenses 48,500 Cash dividends declared 51,300 Dividend revenue 25,900 Retained earnings at December 31, 2013 985,500 Interest revenue 8,400 Effective tax rate of 34% on all items

Explanation / Answer

Administrative expenses $48500 Total operating Expenses ($114200)

Other Expenses

Write-off of inventory due to obsolescence $82100

Casualty loss $58300

Total other expenses ($140400)

Other Income

Interset Revenue $8,400

Dividend Revenue $25900

Total other incme $34300

(b) workings of retained earnings

Ivan Calderon Corp.

Retained Earnings Statement

For the Year Ended December 31, 2014

Retained earnings, Jan. 1, as reported

$ 985,500

Correction for overstatement of net income in prior period

(depreciation error) (net of $16184 tax).......................................................

(31,416)

Retained earnings, Jan. 1, as adjusted......................................................................

954084

Add: Net income......................................................................................................

388200

1,342284

Less: Dividends declared..........................................................................................

(25900)

Retained earnings, Dec. 31.......................................................................................

$1316384

Working note 2

Net Income = Revenue - Operating profit - other expenses+other income

Note 1: formatting of ans has to be more organized

note 2: When a single year is presented, prior period adjustments adjust the beginning balance of retained earnings.

Note 3:Multi-step income statement is divided into two main sections: the operating section and the non-operating sections.

Each and every sub calculation has to be shown clearly in multi step calculation

Revenues Sales $1,390,000 Cost of goods sold 781,500 Gross margin $608500 Operating Expenses Selling expenses $65700