PLEASE HELP! WILL RATE! Presented below is information related to Donaldson Corp

ID: 2596648 • Letter: P

Question

PLEASE HELP! WILL RATE!

Presented below is information related to Donaldson Corp., for the year 2017.

Prepare a multiple-step income statement for 2017. Assume the 200,000 shares of common stock were outstanding during 2017

Net sales $1,950,000 Cost of goods sold 1,200,000 Selling expenses 95,000 Administrative expenses 70,000 Dividend revenue 30,000 Interest revenue 20,000 Interest expense 45,000 Write-off of goodwill due to impairment 75,000 Depreciation expense omitted in 2015 105,000 Dividends declared 120,000 Effect on prior years of change in accounting principle (credit) 220,000 Loss from operations of discontinued component of business 240,000 Gain from disposal of component of business 300,000 Federal tax rate of 30% on all items

Explanation / Answer

Net sales

1950000

Cost of goods sold

1200000

Gross profit

750000

Operating expenses

Selling expenses

95000

Administrative expenses

70000

165000

Income from operations

585000

Other revenues and gains

Dividend revenue

30000

Interest revenue

20000

50000

635000

Other expenses and losses

Interest expense

45000

Loss due to write-off of goodwill

75000

120000

Income before income tax

515000

Income taxes

154500

Income from continuing operations

360500

Discontinued operations

Loss from operations of discontinued component of

business (net of $72,000 income tax effect) (240000*70%)

-168000

Gain from disposal of component of business

(net of $90,000 income tax effect) (300000*70%)

210000

42000

Net income

402500

Per share of common stock:

Income from continuing operations (360500/200000)

1.8

Discontinued operations (42000/200000)

0.21

Net income (402500/200000)

2.01