The following information was taken from the records of Roland Carlson Inc. for

Question

The following information was taken from the records of Roland Carlson Inc. for the year 2014. Income tax applicable to income from continuing operations $192,200; income tax applicable to loss on discontinued operations $30,700; income tax applicable to extraordinary gain $33,558; income tax applicable to extraordinary loss $22,270; and unrealized holding gain on available-for-sale securities $17,500. Extraordinary gain $98,700 Cash dividends declared $159,400 Loss on discontinued operations 80,400 Retained earnings January 1, 2014 606,300 Administrative expenses 250,100 Cost of goods sold 854,300 Rent revenue 48,800 Selling expenses 305,000 Extraordinary loss 65,500 Sales Revenue 1,703,400 Shares outstanding during 2014 were 100,600. prepare a single step income statement,comprehensive income statement, and a retained earning statement

Explanation / Answer

Answer a. Roland Carlson Inc. Income Statement For the Year Ended December 31 2014 Revenues Sales         1,703,400 Rent revenue            48,800 Total revenues      1,752,200 Expenses Cost of goods sold          854,300 Selling expenses          305,000 Administrative expenses          250,100 Total expenses      1,409,400 Income from continuing operations before Income Tax          342,800 Income tax          192,200 Income from continuing operations          150,600 Discontinued operations Loss on discontinued operations          80,400 Less: Applicable income tax reduction          30,700            49,700 Income before extraordinary items          100,900 Extraordinary items: Extraordinary gain          98,700 Less: Applicable income tax          33,558            65,142          166,042 Extraordinary loss          65,500 Less: Applicable income tax reduction          22,270            43,230 Net income          122,812 Per share of common stock: Income from continuing operations ($150600 ÷ 100,600)                 1.50 Loss on discontinued operations, net of tax               (0.49) Income before extraordinary items ($100,900 ÷ 100,600)                 1.00 Extraordinary gain, net of tax                 0.65 Extraordinary loss, net of tax               (0.43) Net income                   1.22 Answer b. Roland Carlson Inc. Retained Earnings Statement For the Year Ended December 31, 2014 Retained earnings, January 1          606,300 Add: Net income          122,812          729,112 Less: Dividends declared          159,400 Retained earnings, December 31          569,712

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