Represented below is info related to American horse company for 2007
retained earnings balance jan 1,2007 980,000
sales for the year 25,000,000
cost of goodssold 17,000,000
interestrevenue 70,000
selling and administrativeexpenses 4,700,000
write-off of goodwill (not taxdeductible) 820,000
income taxes for 2007 905,000
gain on the sale of investments (normalrecurring) 110,000
loss due to flood damage-extraordinary item (net oftax) 390,000
loss on the disposition of the wholesale division (net oftax) 440,000
loss on operations of teh wholesale division (net oftax) 90,000
dividends declared on commonstock 250,000
dividends declared on preferredstock 70,000
Instructions:
prepare a multiple-step income statement and a retained earnings statement. American horse company decided to discontinue its entire wholesale operatoins and to retain its manufacturing operations. On Sept 15, they sold the wholesale operations to Rogers company. During 2007,there were 300,000 shares of common stock outstanding all year.