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cember 31): ales revenue ost of goods sold dministrative expense elling expense Interest revenue Interest expense oss on sale of assets of discontinued component 2024 2023 $5,250,000 $4,350,000 3,030,000 2,170,000 970,000 530,000 167,000 234,000 116,000 845,000 472,000 157,000 234,000

cember 31): ales revenue ost of goods sold dministrative expense elling expense Interest revenue Interest expense oss on sale of assets of discontinued component 2024 2023 $5,250,000 $4,350,000 3,030,000 2,170,000 970,000 530,000 167,000 234,000 116,000 845,000 472,000 157,000 234,000

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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Ashavinbhai 

Selected information about income statement accounts for the Reed Company is presented below (the company's fiscal year ends on December 31): Sales revenue Cost of goods sold Administrative expense Selling expense Interest revenue Interest expense Loss on sale of assets of discontinued component 2024 2023 $ 5,250,000 $ 4,350,000 2,170,000 3,030,000 970,000 530,000 167,000 234,000 116,000 Sales revenue Cost of goods sold Administrative expense Selling expense Operating income before taxes On July 1, 2024, the company adopted a plan to discontinue a division that qualifies as a component of an entity as defined by GAAP. The assets of the component were sold on September 30, 2024, for $116,000 less than their book value. Results of operations for the component (included in the above account balances) were as follows: 845,000 472,000 157,000 234,000 1/1/2024-9/30/2024 $ 570,000 (375,000) (67,000) (37,000) $ 91,000 2023 $ 670,000 (422,000) (57,000) (37,000) $ 154,000 In addition to the account balances above, several events occurred during 2024 that have not yet been reflected in the above accounts: 1. A fire caused $67,000 in uninsured damages to the main office building. The fire was considered to be an unusual event. 2. Inventory that had cost $57,000 had become obsolete because a competitor introduced a better product. The inventory was written down to its scrap value of $8,000. 3. Income taxes have not yet been recorded. Required: Prepare a multiple-step income statement for the Reed Company for 2024, showing 2023 information in comparative format, including income taxes computed at 25% and EPS disclosures assuming 800,000 shares of outstanding common stock. Note: Round EPS answers to 2 decimal places.
Transcribed Image Text:Selected information about income statement accounts for the Reed Company is presented below (the company's fiscal year ends on December 31): Sales revenue Cost of goods sold Administrative expense Selling expense Interest revenue Interest expense Loss on sale of assets of discontinued component 2024 2023 $ 5,250,000 $ 4,350,000 2,170,000 3,030,000 970,000 530,000 167,000 234,000 116,000 Sales revenue Cost of goods sold Administrative expense Selling expense Operating income before taxes On July 1, 2024, the company adopted a plan to discontinue a division that qualifies as a component of an entity as defined by GAAP. The assets of the component were sold on September 30, 2024, for $116,000 less than their book value. Results of operations for the component (included in the above account balances) were as follows: 845,000 472,000 157,000 234,000 1/1/2024-9/30/2024 $ 570,000 (375,000) (67,000) (37,000) $ 91,000 2023 $ 670,000 (422,000) (57,000) (37,000) $ 154,000 In addition to the account balances above, several events occurred during 2024 that have not yet been reflected in the above accounts: 1. A fire caused $67,000 in uninsured damages to the main office building. The fire was considered to be an unusual event. 2. Inventory that had cost $57,000 had become obsolete because a competitor introduced a better product. The inventory was written down to its scrap value of $8,000. 3. Income taxes have not yet been recorded. Required: Prepare a multiple-step income statement for the Reed Company for 2024, showing 2023 information in comparative format, including income taxes computed at 25% and EPS disclosures assuming 800,000 shares of outstanding common stock. Note: Round EPS answers to 2 decimal places.
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