The following information is related to Tamarisk Company for 2017. Tamarisk Comp
ID: 2535970 • Letter: T
Question
The following information is related to Tamarisk Company for 2017.
Tamarisk Company decided to discontinue its entire wholesale operations (considered a discontinued operation) and to retain its manufacturing operations. On September 15, Tamarisk sold the wholesale operations to Rogers Company. During 2017, there were 518,000 shares of common stock outstanding all year.
Please Prepare a Multi-Step Income Statement
Retained earnings balance, January 1, 2017 $997,920 Sales Revenue 26,276,500 Cost of goods sold 16,204,700 Interest revenue 80,500 Selling and administrative expenses 4,747,500 Write-off of goodwill 826,300 Income taxes for 2017 1,345,000 Gain on the sale of investments 117,800 Loss due to flood damage 391,000 Loss on the disposition of the wholesale division (net of tax) 446,800 Loss on operations of the wholesale division (net of tax) 86,050 Dividends declared on common stock 227,100 Dividends declared on preferred stock 75,590Explanation / Answer
Particulars Amount ($) Amount ($) Net Sales 2,62,76,500 Less: Cost of goods sold -1,62,04,700 Gross profit 1,00,71,800 Less: Operating Expenses Selling and administrative expenses -47,47,500 Operating Income 53,24,300 Other Income & Expenses: Interest Revenue 80500 Write off of goodwill -826300 Gain on sale of investments 117800 Net other income and Expenses -6,28,000 Income from operations before tax 46,96,300 Less: Income taxes -13,45,000 Net income from operations 33,51,300 Less: Extraordinary items: Loss due to flood damage -391000 Income from continued operations 29,60,300 Less: Loss from discontinued operations -532850 Net Income 24,27,450 Number of common shares 518000 Earnings per share 4.69
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