(Learning Objective 1: Preparing a complex income statement) The following information was taken from the records of Filner Cosmetics, Inc., at December 31, 20X8.
|
Prior period adjustment debit to Retained Earnings |
$ 4,000 |
Dividends on common stock |
$37,000 |
|
Income tax expense (saving): |
Interest expense |
23,000 |
|
|
Continuing operations |
28,000 |
Gain on lawsuit settlement |
8,000 |
|
Income from discontinued operations |
2,000 |
Dividend revenue |
11,000 |
|
Extraordinary loss |
(10,800) |
Treasury stock, common (2,000 shares at cost) |
28,000 |
|
Loss on sale of plant assets |
10,000 |
General expenses |
71,000 |
|
Income from discontinued operations |
7,000 |
Sales revenue |
567,000 |
|
Preferred stock, 6%, $25 par, 4,000 shares issued |
100,000 |
Retained earnings, beginning, as originally reported |
63,000 |
|
Extraordinary loss |
22,400 |
Selling expenses |
87,000 |
|
Cost of goods sold |
319,000 |
Common stock, no par, 22,000 shares authorized and issued |
350,000 |
Required
1. Prepare Filner Cosmetics’ single step income statement, which lists all revenues together and all expenses together, for the fiscal year ended December 31, 20X8. Include earnings per share data.
2. Evaluate income for the year ended December 31, 20X8. Filner’s top managers hoped to earn income from continuing operations equal to 10% of sales. (Challenge)