Prepare an income statement. (LO 1)
The following balances appeared in the general ledger for Ski Daddle Corporation at fiscal year-end December 31, 2007 .
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Selling and administrative expenses
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$ 45,000
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Other revenues and gains
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80,000
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Operating expenses
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110,000
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Cost of goods sold
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185,000
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Net sales
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325,000
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Other expenses and losses
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8,000
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Inaddition, the following occurred throughout the year.
1. On August 20, a fire destroyed one of the company's warehouses resulting in an extra ordinary loss of $35,000.
2. On October 31, the company discontinued one of its unprofitable segments. The loss from operations was $35,000. The assets of the segment were sold at a gain of $19,000.
Required
a. Assume Ski Daddle Corporation's income tax rate is 30%; prepare the income statement for the year ended December 31, 2007.
b. Calculate the earnings per share the company would report on the income statement assuming Ski Daddle had 100,000 shares of common stock outstanding during the year and paid preferred dividends of $15,000.