1- prepare a multiple-step income statement for 2014. 2- Prepare a separate reta

Question

1- prepare a multiple-step income statement for 2014.

2- Prepare a separate retained earnings statement for 2014.

Presented below is information related to Ivan Calderon Corp. for the year 2014. Net sales $1,377,000 Write-off of inventory due to obsolescence $84,400 Cost of goods sold 788,100 Depreciation expense omitted by accident in 2013 45,200 Selling expenses 72,800 Casualty loss (extraordinary item) before taxes 56,800 Administrative expenses 51,100 Cash dividends declared 46,400 Dividend revenue 23,300 Retained earnings at December 31, 2013 984,800 Interest revenue 8,200 Effective tax rate of 34% on all items Prepare a multiple-step income statement for 2014. Assume that 60,800 shares of common stock are outstanding.

Explanation / Answer

1)

2)

Income statement for the year 2014 Net sales $ 13,77,000.00 Less: Cost of goods sold $    7,88,100.00 Gross profit $    5,88,900.00 Less: Operating expenses: Selling expense $       72,800.00 Administrative expense $       51,100.00 Write off inventory due to obsolescence $       84,400.00 $    2,08,300.00 Operating profit $    3,80,600.00 Other Incomes and Expenses Dividend revenue $       23,300.00 interest revenue $          8,200.00 $       31,500.00 Incme before extraordinary items $    3,49,100.00 Extraordinary items Casualty loss $       56,800.00 $       56,800.00 net income before tax $    2,92,300.00 Tax expense @ 34% $       99,382.00 Net income $    1,92,918.00 Number of shares outstanding 60800 Earning per share $ 3.17

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