P4-1 (Multiple-Step Income, Retained Earnings) The following information is related to Dickinson
Company for 2014.
Retained earnings balance, January 1, 2014 $ 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 2014 1,244,000
Gain on the sale of investments (normal recurring) 110,000
Loss due to fl ood damage—extraordinary item (net of tax) 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
Copyright ©2013 John Wiley & Sons, Inc.
Dividends declared on common stock $250,000
Dividends declared on preferred stock 80,000
Dickinson Company decided to discontinue its entire wholesale operations and to retain its manufacturing
operations. On September 15, Dickinson sold the wholesale operations to Rogers Company. During 2014,
there were 500,000 shares of common stock outstanding all year.
Prepare a multiple-step income statement and a retained earnings statement.
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