Presented below is information related to Baskins Corporation for its fiscal year ending June 30, 2016. During the year, the Board of Directors decided to discontinue the operations of its entire Robbins division because the employees kept eating the inventory and retain its Chocolate manufacturing operations. In November 2015, Baskins sold the Robbins operations to Braum's Company. The following amounts were taken from Robbin's general ledger:
Administrative expenses $ 70,000
Cost of goods sold 1,200,000
Depreciation expense omitted in 2014 105,000
Dividends declared 120,000
Gain from disposal of Robbins division 300,000
Gain on sale of investments 30,000
Interest expense 45,000
Interest revenue 20,000
Loss from operations of Robbins division 240,000
Retained earnings, July 1, 2015 740,000
Sales 2,000,000
Sales returns 50,000
Selling expenses 95,000
Unrealized gain on available-for-sale securities 220,000
Write-off of inventory due to obsolescence (I would have eaten it!) 75,000
Additional information:
All amounts are before tax. Assume a 30% tax rate when calculating income taxes. This includes items such as ordinary income, discontinued operations, other comprehensive income and prior period adjustments if applicable.
There are 200,000 shares of common stock outstanding for the Earnings per share (EPS) disclosure. All EPS amounts should be rounded to pennies.
INSTRUCTIONS: Use appropriate headings on all financial statements
Prepare an Income Statement (multi-step of course) for the year ended June 30, 2016.
Prepare a separate Statement of Comprehensive Income for the year ended June 30, 2016
Prepare a Statement of Retained Earnings for the year ended June 30, 2016.
Your work should be professional as if you were presenting these financial statements to a client. For example, (1) no abbreviations, (2) use dollar signs, underlines and double underlines appropriately, (3) use commas for amounts greater than $999 and (4) use appropriate headings.