Selected information about income statement accounts for the Reed Company is pre
ID: 2461617 • Letter: S
Question
Selected information about income statement accounts for the Reed Company is presented below (the company's fiscal year ends on December 31):
On July 1, 2013, the company adopted a plan to discontinue a division that qualifies as a component of an entity as defined by GAAP. The assets of the component were sold on September 30, 2013, for $126,000 less than their book value. Results of operations for the component (included in the above account balances) were as follows:
In addition to the account balances above, several events occurred during 2013 that have not yet been reflected in the above accounts:
Prepare a multiple-step income statement for the Reed Company for 2013, showing 2012 information in comparative format, including income taxes computed at 30% and EPS disclosures assuming 700,000 shares of common stock. (Amounts to be deducted should be indicated with a minus sign.Round EPS answers to 2 decimal places.)
Selected information about income statement accounts for the Reed Company is presented below (the company's fiscal year ends on December 31):
Explanation / Answer
Income Statement
Particulars
2013
2012
Revenue from operations
5,350,000
4,450,000
Interest Revenue
169,000
159,000
Total
5,519,000
4,609,000
Expenses
Cost of goods sold
(3,050,000)
(2,190,000)
Administrative expenses
(990,000)
(865,000)
Selling Expenses
(550,000)
(502,000)
Interest expenses
(238,000)
(238,000)
Total Expenses
48,28,000
37,95,000
Profir before exceptional and extraordinary items and tax
691,000
8,14,000
Extraordinary items
Loss on sale of assets
(126,000)
-
Loss due to fire
(69,000)
-
Loss due to earthquake
(119,000)
-
Loss of Inventory
(53,000)
-
Profit Before Tax
324,000
8,14,000
Tax Expense
(97,200)
(244,200)
Profit for the period from continuing operations
2,27,000
6,66,000
Profit from discontinuing operations
97,000
148,000
Profit from discontinuing operations(after tax)
67,900
103,200
Profit for the Period
226,800
569,800
EPS
.324
.814
Particulars
2013
2012
Revenue from operations
5,350,000
4,450,000
Interest Revenue
169,000
159,000
Total
5,519,000
4,609,000
Expenses
Cost of goods sold
(3,050,000)
(2,190,000)
Administrative expenses
(990,000)
(865,000)
Selling Expenses
(550,000)
(502,000)
Interest expenses
(238,000)
(238,000)
Total Expenses
48,28,000
37,95,000
Profir before exceptional and extraordinary items and tax
691,000
8,14,000
Extraordinary items
Loss on sale of assets
(126,000)
-
Loss due to fire
(69,000)
-
Loss due to earthquake
(119,000)
-
Loss of Inventory
(53,000)
-
Profit Before Tax
324,000
8,14,000
Tax Expense
(97,200)
(244,200)
Profit for the period from continuing operations
2,27,000
6,66,000
Profit from discontinuing operations
97,000
148,000
Profit from discontinuing operations(after tax)
67,900
103,200
Profit for the Period
226,800
569,800
EPS
.324
.814
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