Assignment:
Smith Company
Retained earnings, 12/31/05 750,000
Sales 2,000,000
Selling & administration 240,000
Hurricane loss (pre tax) on plant (extraordinary item) 250,000
Cash dividends declared on common stock 33,600
Cost of goods sold 960,000
Gain resulting from computation error
on depreciation charge in 2004 (pre tax) 420,000
Other revenue 80,000
Other expenses 50,000
Instructions:
Prepare in good form a multi-step income statement for the year 2006. Assume a 30% tax rate and that 50,000 shares of common stock were outstanding during the year.