Problem - Prepare Multiple-step income statement
Presented below is information related to Farr Company.
Retained earnings, December 31, 2010 $ 650,000
Sales 1,400,000
Selling and administrative expenses 240,000
Hurricane loss (pre-tax) on plant (extraordinary item) 290,000
Cash dividends declared on common stock 33,600
Cost of goods sold 780,000
Gain resulting from computation error on depreciation charge in 2009 (pre-tax) 520,000
Other revenue 120,000
Other expenses 100,000
Instructions - Prepare in good form a multiple-step income statement for the year 2011. Assume a 30% tax rate and that 80,000 shares of common stock were outstanding during the year.