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I need help on the last part, there are 4 wrong answers that I cannot figured out. The wrong answers are marked in

red. 10484349

10484356

attachment_09232019.png

Selected information about income statement accounts for the Reed Company is presented
below (the company's fiscal year ends on December 31):
2018
2017
Sales
$5, 050, 000 $4, 150, 000
Cost of goods sold
2, 990, 000
2, 130, 000
Administrative expenses
930, 000
805, 000
Selling expenses
490, 000
442, 000
Interest revenue
163, 000
153, 000
Interest expense
226, 000
226, 000
Loss on sale of assets of discontinued component
102,000
On July 1, 2018, the company adopted a plan to discontinue a division that qualifies as a
component of an entity as defined by GAAP. The assets of the component were sold on
September 30, 2018, for $102,000 less than their book value. Results of operations for the
component (included in the above account balances) were as follows:
1/1/18-9/30/18
2017
Sales
$ 530, 000
$ 630, 000
Cost of goods sold
(355, 000)
(398, 000)
Administrative expenses
(63, 000)
(53, 000)
Selling expenses
(33, 000)
(43, 000)
Operating income before taxes
$
79, 000
$ 136, 000
In addition to the account balances above, several events occurred during 2018 that have not
yet been reflected in the above accounts:
1. A fire caused $63,000 in uninsured damages to the main office building. The fire was
considered to be an infrequent but not unusual event.
2. Inventory that had cost $53,000 had become obsolete because a competitor introduced a
better product. The inventory was sold as scrap for $4,000.
3. Income taxes have not yet been recorded.
Required:
Prepare a multiple-step income statement for the Reed Company for 2018, showing 2017
information in comparative format, including income taxes computed at 40% and EPS
disclosures assuming 500,000 shares of common stock. (Amounts to be deducted should be
indicated with a minus sign. Round EPS answers to 2 decimal places.)
Answer is complete but not entirely correct.
REED COMPANY
Comparative Income Statements
For the Years Ended December 31
2018
2017
Sales revenue
$ 4,520,000 $ 3,520,000
Cost of goods sold
(2,635,000) (1,732,000)
Gross profit (loss)
1,885,000
1,788,000

attachment_09232019.png

Selected information about income statement accounts for the Reed Company is presented
below (the company's fiscal year ends on December 31):
2018
2017
Sales
$5, 050, 000 $4, 150, 000
Cost of goods sold
2, 990, 000
2, 130, 000
Administrative expenses
930, 000
805, 000
Selling expenses
490, 000
442, 000
Interest revenue
163, 000
153, 000
Interest expense
226, 000
226, 000
Loss on sale of assets of discontinued component
102,000
On July 1, 2018, the company adopted a plan to discontinue a division that qualifies as a
component of an entity as defined by GAAP. The assets of the component were sold on
September 30, 2018, for $102,000 less than their book value. Results of operations for the
component (included in the above account balances) were as follows:
1/1/18-9/30/18
2017
Sales
$ 530, 000
$ 630, 000
Cost of goods sold
(355, 000)
(398, 000)
Administrative expenses
(63, 000)
(53, 000)
Selling expenses
(33, 000)
(43, 000)
Operating income before taxes
$
79, 000
$ 136, 000
In addition to the account balances above, several events occurred during 2018 that have not
yet been reflected in the above accounts:
1. A fire caused $63,000 in uninsured damages to the main office building. The fire was
considered to be an infrequent but not unusual event.
2. Inventory that had cost $53,000 had become obsolete because a competitor introduced a
better product. The inventory was sold as scrap for $4,000.
3. Income taxes have not yet been recorded.
Required:
Prepare a multiple-step income statement for the Reed Company for 2018, showing 2017
information in comparative format, including income taxes computed at 40% and EPS
disclosures assuming 500,000 shares of common stock. (Amounts to be deducted should be
indicated with a minus sign. Round EPS answers to 2 decimal places.)
Answer is complete but not entirely correct.
REED COMPANY
Comparative Income Statements
For the Years Ended December 31
2018
2017
Sales revenue
$ 4,520,000 $ 3,520,000
Cost of goods sold
(2,635,000) (1,732,000)
Gross profit (loss)
1,885,000
1,788,000

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