Terri Chichester_unit6_project

Terri Chichester_unit6_project - P5-9 Name: 1. Prepare a...

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Unformatted text preview: P5-9 Name: 1. Prepare a multiple-step format income statement by filling in the line items and amounts in the shaded cells. An asterisk (*) will appear next to an incorrect amount in specific cells. OLSEN COMPANY Income Statement For Year Ended December 31, 2010 Sales Revenue $196,000 Cost of goods sold (120,100) Gross Profit $75,900 Operating expenses Selling expense $19,600 Administrative expense 16,800 Total operating expenses (36,400) Operating income $39,500 Other items Gain on sale of equipment $3,200 Interest revenue 2,300 Interest expense (3,400) 2,100 Pretax income from continuing operations 41,600 Income tax expense (12,480) Income from continuing operations $29,120 Results from discontinued operations Loss from operations of discontinued division L (Net of $900 income tax credit) ($2,100) Gain on sale of division L (net of $1,350 income taxes) 3,150 1,050 Income before extraordinary items $30,170 Extrordinary loss because of earthquake (net of $1,800 income tax credit) (4,200) Net Income $25,970 Components of Income Income from continuing operations Results from discontinued operations Extraordinary loss due to earthquake Net Income Earnings per common share (8,000 shares) $3.64 0.13 (0.52) $3.25 2. Prepare a retained earnings statement by filling in the line items and amounts in the shaded cells. An asterisk (*) will appear next to an incorrect amount in the specific cells. OLSEN COMPANY Statement of Retained Earnings For Year Ended December 31, 2010 Retained Earnings, January 1, 2010 Less: Correction of overstatement in last years income Because of error ( net of $1,650 income tax credit) Adjusted retained earnings January 1, 2010 Add: Net income Less: Dividends, $0.50 per share Retained earnings, December 31, 2010 $59,300 $3,850 55,450 25,970 $81,420 (4,000) $77,420 Terri Chichester ...
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