presented below is info related to American horse company for2007 retained earni
ID: 2458004 • Letter: P
Question
presented below is info related to American horse company for2007 retained earnings balance jan 1,2007 980,000 sales for tehyear 25,000,000 cost of goodssold 17,000,000 interestrevenue 70,000 selling and administrativeexpenses 4,700,000 write-off of goodwill (not taxdeductible) 820,000 income taxes for2007 905,000 gain on the sale of investments (normalrecurring) 110,000 loss due to flood damage-extraordinary item (net oftax) 390,000 loss on the disposition of the wholesale division (net oftax) 440,000 loss on operations of teh wholesale division (net oftax) 90,000 dividends declared on commonstock 250,000 dividends declared on preferredstock 70,000 instructions prepare a multiple-step income statement and a retainedearnings statement. American horse companydecided to discontinue its entire wholesale operatoins and toretain its manufacturing operations. On Sept 15, they soldteh wholesale operations to Rogers company. During 2007,theere were 300,000 shares of common stock outstanding allyear presented below is info related to American horse company for2007 retained earnings balance jan 1,2007 980,000 sales for tehyear 25,000,000 cost of goodssold 17,000,000 interestrevenue 70,000 selling and administrativeexpenses 4,700,000 write-off of goodwill (not taxdeductible) 820,000 income taxes for2007 905,000 gain on the sale of investments (normalrecurring) 110,000 loss due to flood damage-extraordinary item (net oftax) 390,000 loss on the disposition of the wholesale division (net oftax) 440,000 loss on operations of teh wholesale division (net oftax) 90,000 dividends declared on commonstock 250,000 dividends declared on preferredstock 70,000 instructions prepare a multiple-step income statement and a retainedearnings statement. American horse companydecided to discontinue its entire wholesale operatoins and toretain its manufacturing operations. On Sept 15, they soldteh wholesale operations to Rogers company. During 2007,theere were 300,000 shares of common stock outstanding allyearExplanation / Answer
Sales Revenue 25,000,000.00 Cost of Goods Sold 17,000,000.00 Gross Profit 8,000,000.00 Selling & Administative Expenses (4,700,000.00) Income from Operations 3,300,000.00 Other Revenues & Gains Interest Revenue 70,000.00 Gain on Sale of Investment 110,000.00 Income from continuing operations 3,480,000.00 before Income Tax Income Taxes for 2007 (905,000.00) Income from continuing operations 2,575,000.00 after Income Taxes Write off of Goodwill (820,000.00) Income from continuing operations 1,755,000.00 after Income Taxes Discontinued Operations Loss on the operations of whole sale division ( Net of taxes ) (90,000.00) Loss on the disposition of the (440,000.00) (530,000.00) whole sale division( Net of Taxes ) Income before extraordinary item 1,225,000.00 Extra ordinary item ( Net of Taxes ) (390,000.00) Net Income 835,000.00 Per Share of Common Stock Income from Continuing operations 3480000 / 300000 11.60 Loss on the operations of whole 90000 / 300000 (0.30) sale division ( Net of taxes ) Loss on the disposition of the 440000 / 300000 (1.47) whole sale division( Net of Taxes ) Write off of Goodwill 820000 / 300000 (2.73) Extra ordinary item ( Net of Taxes ) 390000 / 300000 (1.30) Earning Per Share 5.80
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