(Multiple-Step Statement with Retained Earnings) Presented below is information related to Brokaw Corp. for the year 2012.
|
Net sales
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$1,200,000
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Write-off of inventory due to obsolescence
|
$ 80,000
|
|
Cost of goods sold
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780,000
|
Depreciation expense omitted by accident in 2011
|
40,000
|
|
Selling expenses
|
65,000
|
Casualty loss (extraordinary item) before taxes
|
50,000
|
|
Administrative expenses
|
48,000
|
Cash dividends declared
|
45,000
|
|
Dividend revenue
|
20,000
|
Retained earnings at December 31, 2011
|
980,000
|
|
Interest revenue
|
7,000
|
Effective tax rate of 34% on all items
|
|
Instructions
(a) Prepare a multiple-step income statement for 2012. Assume that 60,000 shares of common stock are outstanding.
(b) Prepare a retained earnings statement for 2012.