Question - The following pretax amounts pertain to the Spartan Corp. for the year ended December 31, 2014.
Sales $ 400,000
Operating expenses 84,000
Extraordinary gain 30,000
Interest expense 4,000
Cost of goods sold 280,000
Gain on sale of equipment 10,000
Prior period adjustment (16,000)
Gain on disposal of business component 30,000
Retained earnings, January 1, 2014 1,600,000
Dividends declared 12,000
The effective corporate tax rate is 30 percent. The company had 10,000 shares of common stock outstanding for the entire year.
(1) Prepare a multiple-step income statement in good form for the year ended December 31, 2014.
(2) Prepare a retained earnings statement in good form for the year ended December 31, 2014.