The following information is related to Concord Company for 2017. Concord Compan
ID: 2587630 • Letter: T
Question
The following information is related to Concord Company for 2017.
Concord Company decided to discontinue its entire wholesale operations (considered a discontinued operation) and to retain its manufacturing operations. On September 15, Concord sold the wholesale operations to Rogers Company. During 2017, there were 547,900 shares of common stock outstanding all year.
1. Prepare a multiple-step income statement.
2. Prepare a retained earnings statement.
Retained earnings balance, January 1, 2017 $983,980 Sales Revenue 26,111,200 Cost of goods sold 16,270,700 Interest revenue 78,300 Selling and administrative expenses 4,791,200 Write-off of goodwill 839,300 Income taxes for 2017 1,430,000 Gain on the sale of investments 112,800 Loss due to flood damage 399,900 Loss on the disposition of the wholesale division (net of tax) 456,100 Loss on operations of the wholesale division (net of tax) 97,110 Dividends declared on common stock 248,900 Dividends declared on preferred stock 87,900Explanation / Answer
1. Calculation of Multiple Step Income Statement
Less : Operating Expense :
Other Incomes and Expenses:
2. Retained Earning Statement
*When dividend declared on stock, its mandatory to pay a dividend in future. That is why we have deducted from the retained earning.
Particulars Amount Sales 26111200 Less : Cost of goods sold (16270700) Gross Profit 9840500Less : Operating Expense :
- Selling and administrative expenses: 4791200
Other Incomes and Expenses:
- Gain on the sale of investments: 112800
- Add: Interest Revenue: 78300
- Less:Loss due to flood damage: (399900)
- Less:Loss on the disposition of the wholesale division: (456100)
- Less:Loss on operations of the wholesale division: (97110)
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