View the step-by-step solution to:

# DICKINSON COMPANY Income Statement for the year ended in December 31, 2014 Particulars Amount Sales Cost of goods sold \$ 25,000,000.00 \$...

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

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

3 4

5 7

PROBLEMS

Problems 197

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.

Instructions

Prepare a multiple-step income statement and a retained earnings statement.

My question is how do you Earnings Per Share

DICKINSON COMPANY Income Statement for the year ended in December 31, 2014 Particulars Amount Sales \$ 25,000,000.00 On the income statement you must subract Cost of goods sold \$ (16,000,000.00) 9,000,000. Then you take the 9,000,000 fro you you income from opera±on of 4,300,000 Gross Profit \$ 9,000,000.00 interest revenue which come out to 180,000 Selling & Administrative Expenses \$ (4,700,000.00) which is 820,000 you add that with you inco tax of 3,660,000 then subtrack income tax o Income from operations \$ 4,300,000.00 with discon±nue opera±on you would add lo net of tax which is 440,000 and 90,000 that Other revenues & gains: 530,000 and you get 1,886,000 that is your i Gain on sales of investments \$ 110,000.00 item, loss from ²ood damage, net of tax. You Interest revenue \$ 70,000.00 \$ 180,000.00 Other expenses & losses: Write-off goodwill \$ 820,000.00 Income from continuing operations before income tax \$ 3,660,000.00 Income Tax \$ (1,244,000.00) Income from continuing operations \$ 2,416,000.00 Discontinued Operations: Loss on disposal, net of tax \$ 440,000.00 Loss of operations, net of tax \$ 90,000.00 \$ 530,000.00 Income before Extraordinary items \$ 1,886,000.00 Extraordinary item, loss from flood damage, net of tax \$ (390,000.00) Net Income \$ 1,496,000.00 Earnings per share: Income from continuing operations \$ 4.67 Discontinued operations: Loss on disposal, net of tax \$ (0.88) Loss of operations, net of tax \$ (0.18) \$ (1.06) Income before extraordinary item \$ 3.61 Extraordinary loss, net of tax \$ (0.78) Net Income \$ 2.83 Dickinson Company Retained Earnings Statement For the year ended January 1, 2014 Particulars Amount Retained Earnings, January 1 \$ 980,000.00 Net Income \$ 1,496,000.00 Dividends: Common Stock \$ 250,000.00 Preferred Stock \$ 80,000.00 \$ 330,000.00 Reatined Earnings, December 31 \$ 2,146,000.00 2,416,000-80,000/500,000=4.67 1,886,000-80,000/500,000=3.61 1,496,000-80,000/500,000=2.83
sales from cost of goods sold and you come up with m the selling & Administra±ve Expense which gives 0. Now you add gain on slaes of investment with 0. You have your other expenses write oF goodwill ome from con±nuing opera±on before income of 1,244,000, that will give you 2,416,000. Now oss on disposal net of tax with loss of opera±ons, brings you 530,000 now you subract 2,416,000 from income before extraordinary items, subtract extraordinary u subtract 390,000 and you net incom 1,496,000
Show entire document

Here's the explanation you needed for... View the full answer

P4-1 Multiple-Step Income, Retained Earnings
Dickinson Company
Income Statement
For the Year Ended December 31, 2014
Sales revenue
Cost of goods sold
Gross profit

### Why Join Course Hero?

Course Hero has all the homework and study help you need to succeed! We’ve got course-specific notes, study guides, and practice tests along with expert tutors.

### -

Educational Resources
• ### -

Study Documents

Find the best study resources around, tagged to your specific courses. Share your own to gain free Course Hero access.

Browse Documents