Answer:
Net income is $2,474,000
Retained earning for the year 2017 is $2,142,000
Retained earnings balance at December 31, 2017 is $3,123,000
Explanation:
A multi-step income statement is an income statement that shows gross profit and the detailed of each category of expenses and incomes to arrive at the net income of a company for a particular period.
This can be prepared as follows:
Kingbird Company
Mutiple step income statement
for the year ended December 31, 2017
<u>Details $ </u>
Sales Revenue 26,100,000
Cost of goods sold <u> (16,100,000) </u>
Gross profit 10,000,000
Operating expenses:
Selling and administrative expenses <u> (4,710,000) </u>
Operating income 5,290,000
Other income (loss):
Gain on the sale of investments 111,000
Write-off of goodwill (821,000)
Loss due to flood damage (391,000)
Interest income:
Interest revenue <u> 71,000 </u>
Income before tax 4,260,000
Income taxes for 2017 <u> (1,254,000) </u>
Income after tax 3,006,000
Extraordinary items:
Loss on wholesale div. disp. (net of tax) (441,000)
Loss on wholesale div. op. (net of tax) <u> (91,000) </u>
Net income 2,474,000
Preferred stock dividend (81,000)
Common stock dividend <u> (251,000) </u>
Retained earning for the year 2017 2,142,000
Retained earnings balance, Jan. 1, 2017 <u> 981,000 </u>
Retained earnings bal., Dec. 31, 2017 <u> 3,123,000 </u>
