Answer:
Dickson Company
Multi-step Income Statement for the year ended December 31, 2020:
Sales revenue $25,000,000
Cost of goods sold 16,000,000
Gross profit $9,000,000
Interest revenue 70,000
Total revenue $9,070,000
Selling and
administrative expenses 4,700,000
Write-off of goodwill 820,000 $5,520,000
Income from operations $3,550,000
Gain on the sale of investments 110,000
Loss due to flood damage (390,000)
Income before taxes 3,270,000
Income taxes for 2020 1,244,000
Net Income $2,026,000
Loss on the disposition of
the wholesale division (net of tax) (440,000)
Loss on operations of the
wholesale division (net of tax) (90,000)
Comprehensive Income $1,496,000
EPS = $2.992
Statement of Retained Earnings for the year ended December 31, 2020:
Comprehensive Income $1,496,000
Retained earnings balance, Jan, 1 980,000
Dividends: common stock 250,000
Dividends: preferred stock 80,000 (330,000)
Retained earnings, December 31 $2,146,000
Explanation:
a) Data and Calculations:
Retained earnings balance, January 1, 2020 $980,000
Sales revenue 25,000,000
Cost of goods sold 16,000,000
Interest revenue 70,000
Selling and administrative expenses 4,700,000
Write-off of goodwill 820,000
Income taxes for 2020 1,244,000
Gain on the sale of investments 110,000
Loss due to flood damage 390,000
Loss on the disposition of the wholesale division (net of tax) 440,000
Loss on operations of the wholesale division (net of tax) 90,000
Dividends declared on common stock 250,000
Dividends declared on preferred stock 80,000
b) EPS = $2.992 ($1,496,000/500,000 shares)
