Question - Multiple-step Income, Retained Earnings
Presented below is information related to Dickinson Company for 2010.
Retained earnings balance, January 1, 2010 $980,000
Sales for the year 25,000,000
Cost of goods sold 16,000,000
Interest revenue 70,000
Selling and administrative expenses 4,700,000
Write-off of goodwill (not tax deductible) 820,000
Income taxes for 2010 1,244,000
Gain on the sale of investments (normal recurring) 110,000
Loss due to flood damage-extraordinary item (net of tax) 390,000
Loss on the disposition of the wholesale division (net of tax) 440,000
Loss on operations of the wholesale division (net of tax) 90,000
Dividends declared on common stock 250,000
Dividends declared on preferred stock 80,000
Required - Prepare a multiple-step income statement and a retained earnings statement. Dickinson Company decided to discontinue its entire wholesale operations and to retain its manufacturing operations. On September 15, Dickinson sold the wholesale operations to Rogers Company. During 2010, there were 500,000 shares of common stock outstanding all year.