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a. Prepare an income statement and retained earnings statement for Diversified Products for 20X8. b. Prepare an income statement and retained earnings statement for Wealthy Manufacturing for 20X8.

a. Prepare an income statement and retained earnings statement for Diversified Products for 20X8. b. Prepare an income statement and retained earnings statement for Wealthy Manufacturing for 20X8.

FINANCIAL ACCOUNTING
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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Net Sales Cost of Goods Sold Other Expenses Dividends Declared & Paid Retained Earnings, 1/1/X8' Wealthy Manufacturing uses the equity method in accounting for its investment in Diversified Products. The controller was also aware of the following specific transactions for Diversified Products in 20X8, which were not included in the preceding data: 1. Diversified sold its entire Health Technologies division on September 30, 20X8, for $375,000. The book value of Health Technologies division's net assets on that date was $331,000. The division incurred an operating loss of $15,000 in the first nine months of 20X8. 2. During 20X8, Diversified sold one of its delivery trucks after it was involved in an accident and recorded a gain of $10,000. Required: a. Prepare an income statement and retained earnings statement for Diversified Products for 20X8. b. Prepare an income statement and retained earnings statement for Wealthy Manufacturing for 20X8. Req A1 Complete this question by entering your answers in the tabs below. Req A2 Wealthy Manufacturing $ 850,000 670,000 90,000 30,000 420,000 Req B1 Retained earnings, January 1, 20X8 WEALTHY MANUFACTURING COMPANY Retained Earnings Statement Year Ended December 31, 20X8 Prepare a retained earnings statement for Wealthy Manufacturing for 20X8. Note: Amounts to be deducted and loss amounts should be indicated by a minus sign. Retained earnings, December 31, 20X8 Diversified Products $ 400,000 A 320,000 25,000 10,000 260,000 Req B2 $ < Req B1 0 Req B2
Transcribed Image Text:Net Sales Cost of Goods Sold Other Expenses Dividends Declared & Paid Retained Earnings, 1/1/X8' Wealthy Manufacturing uses the equity method in accounting for its investment in Diversified Products. The controller was also aware of the following specific transactions for Diversified Products in 20X8, which were not included in the preceding data: 1. Diversified sold its entire Health Technologies division on September 30, 20X8, for $375,000. The book value of Health Technologies division's net assets on that date was $331,000. The division incurred an operating loss of $15,000 in the first nine months of 20X8. 2. During 20X8, Diversified sold one of its delivery trucks after it was involved in an accident and recorded a gain of $10,000. Required: a. Prepare an income statement and retained earnings statement for Diversified Products for 20X8. b. Prepare an income statement and retained earnings statement for Wealthy Manufacturing for 20X8. Req A1 Complete this question by entering your answers in the tabs below. Req A2 Wealthy Manufacturing $ 850,000 670,000 90,000 30,000 420,000 Req B1 Retained earnings, January 1, 20X8 WEALTHY MANUFACTURING COMPANY Retained Earnings Statement Year Ended December 31, 20X8 Prepare a retained earnings statement for Wealthy Manufacturing for 20X8. Note: Amounts to be deducted and loss amounts should be indicated by a minus sign. Retained earnings, December 31, 20X8 Diversified Products $ 400,000 A 320,000 25,000 10,000 260,000 Req B2 $ < Req B1 0 Req B2
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