2. At the beginning of 2024, Cameron Company's retained earnings was $212,000. For 2024, Cameron has calculated its pretax income from continuing operations to be $120,000. During 2024, the following events also occurred: 1. During July, Cameron sold Division M (a component of the company). The book values of Division M's assets and liabilities are $300,000 and $100,000, respectively, at the time of sale. The company sold Division M for cash $159,500. During 2024 before its sale, Division M recognized revenues of 100,000 and expenses of 61,000 (excluding income tax expense). 2. Cameron had 21,000 shares of common stock outstanding during all of 2024. It declared and paid a $1 per share cash dividend on this stock. 3. Cameron also paid $7,500 cash dividend to its preferred stockholders. Required: Assuming that all the "pretax" items are subject to a 21% income tax rate: 1. Complete the lower portion of Cameron's 2024 income statement, beginning with "Pretax Income from Continuing Operations." 2. Prepare an accompanying retained earnings statement.

2. At the beginning of 2024, Cameron Company's retained earnings was $212,000. For 2024, Cameron has calculated its pretax income from continuing operations to be $120,000. During 2024, the following events also occurred: 1. During July, Cameron sold Division M (a component of the company). The book values of Division M's assets and liabilities are $300,000 and $100,000, respectively, at the time of sale. The company sold Division M for cash $159,500. During 2024 before its sale, Division M recognized revenues of 100,000 and expenses of 61,000 (excluding income tax expense). 2. Cameron had 21,000 shares of common stock outstanding during all of 2024. It declared and paid a $1 per share cash dividend on this stock. 3. Cameron also paid $7,500 cash dividend to its preferred stockholders. Required: Assuming that all the "pretax" items are subject to a 21% income tax rate: 1. Complete the lower portion of Cameron's 2024 income statement, beginning with "Pretax Income from Continuing Operations." 2. Prepare an accompanying retained earnings statement.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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