RCES Exercise 4-9 Presented below is information related to Ivan Calderon Corp.

Question

RCES Exercise 4-9 Presented below is information related to Ivan Calderon Corp. for the year 2014. accident in 45,300 787,500 2013 Depreciation expense omitted by accident in Cost of goods sold 67,000 50,400 Cash dividends declared 25,700Retained earnings at December 31, 2013 59,30o 52,500 Selling expenses Casualty loss (extraordinary item) before taxes Administrative expenses Dividend revenue Interest revenue 988,700 7,000 Effective tax rate of 34% on all items Prepare a step income statement for 2014. Assume that 60,300 shares of common stock are outstanding. (Round earnings pe IVAN Income Statement For the Year Er 31, 2014

Explanation / Answer

Calderon Corporation Multiple Step Income statement for the Year 2014 Net Sales 1371000 Cost of Goods sold 787500 Gross Profit 583500 Selling Expenses 67000 Administrative Expenses 50400 Inventory written off 81300 Income 384800 Other Income Dividend Revenue 25700 Interest Revenue 7000 Income Before taxes 417500 Less: Prior period Expense 45300 Less: Extraordinary Item 59300 Income before taxes 312900 Taxes@ 34% 106386 Earning after taxes 206514 Statement of Retained Earnings Opening Retained Earning 988700 Add: Net Income 206514 Less: Dividend -52500 Closing Retained Earnings 1142714

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