In good form using proper classifications prepare an income


Question: The Andrew Company reported the following amounts on its trial balance as of December 31, 2016:

Sales revenue:                                                             $551,000

Sales returns and allowances:                                         $75,000

Cost of goods sold:                                                       $102,000

Selling expenses:                                                          $67,000

Administrative expenses:                                                $71,000

An unusual loss due to a flood:                                        $89,000

Interest revenue:                                                          $5,600

Gain on a sale of a machine:                                            $4,400

Beginning Balance RE                                                      $420,000

Common stock shares outstanding                                        50,000

On January 1, 2016 the company decided to sell off its coffee bean unit and declared it a discontinued operation. It had an operating profit of $198,000 before tax up until the date of sale, October 1, 2016 at which time it recorded a loss of $57,000 before tax on the sale of the coffee bean division.

The auditors also discovered that in 2015, depreciation expense was understated by $30,000 before tax.

A cash dividend was paid on the common stock of $2.50 per share

Andrew Company has a tax rate of 34%. It declared a cash dividend of $1 per share in 2016.

Required: In good form using proper classifications prepare an Income Statement with Earnings per Share Calculated and Statement of Retained Earnings for the Andrew Company for the year ended December 31, 2016.

Solution Preview :

Prepared by a verified Expert
Accounting Basics: In good form using proper classifications prepare an income
Reference No:- TGS02548055

Now Priced at $10 (50% Discount)

Recommended (93%)

Rated (4.5/5)