E5-17 Income Statement and Retained Earnings Huff Company presents the following items derived from its December 31, 2019, adjusted trial balance: LO 5.4 LO 5.10 Sales (net) Interest expense Cost of goods sold $124,000 3.700 66,200 Operating expenses Common stock, $5 par Retained earnings, 1/1/2019 $30,400 22,000 45,800 SHOW ME HOW The following information is also available for 2019 and is not reflected in the preceding accounts: 1. The common stock has been outstanding all year. A cash dividend of S1.28 per share was declared and paid. 2. Land was sold at a pretax gain of S6.300. Division X (a major component of the company) was sold at a pretax gain of $4,700. It had incurred a $9,500 pretax operating loss during 2019. 3. 4. A tornado, which is an unusual event in the area, caused a $5,400 pretax loss. 5. The income tax rate on all items of income is 30%. 6. The average sharcholders' equity is S90,000. Required: 1 Prepare a 2019 multiple-step income statement for Huff 2. Prepare a 2019 retained carnings statement. Compute the 2019 return. on common equity (Net Income 4 Average Sharcholders Equity)
E5-17 Income Statement and Retained Earnings Huff Company presents the following items derived from its December 31, 2019, adjusted trial balance: LO 5.4 LO 5.10 Sales (net) Interest expense Cost of goods sold $124,000 3.700 66,200 Operating expenses Common stock, $5 par Retained earnings, 1/1/2019 $30,400 22,000 45,800 SHOW ME HOW The following information is also available for 2019 and is not reflected in the preceding accounts: 1. The common stock has been outstanding all year. A cash dividend of S1.28 per share was declared and paid. 2. Land was sold at a pretax gain of S6.300. Division X (a major component of the company) was sold at a pretax gain of $4,700. It had incurred a $9,500 pretax operating loss during 2019. 3. 4. A tornado, which is an unusual event in the area, caused a $5,400 pretax loss. 5. The income tax rate on all items of income is 30%. 6. The average sharcholders' equity is S90,000. Required: 1 Prepare a 2019 multiple-step income statement for Huff 2. Prepare a 2019 retained carnings statement. Compute the 2019 return. on common equity (Net Income 4 Average Sharcholders Equity)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Income Statement and Retained Earnings Huff Company presents the following items derived from its
December 31, 2019, adjusted trial balance:
E5-17
LO 5.4
LO 5.10
Sales (net)
Interest expense
Cost of goods sold
$124,000
3,700
66,200
Operating expenses
Common stock, $5 par
Retained earnings, 1/1/2019
$30,400
22,000
45,800
The following information is also available for 2019 and is not reflected in the preceding accounts:
1 The common stock has been outstanding all year. A cash dividend of S1.28 per share was declared and paid.
2.
SHOW
ME HOW
Land was sold at a pretax gain of S6,300.
3.
Division X (a major component of the company) was sold at a pretax gain of $4,700 It had incurred a $9.500
pretax opcrating loss during 2019
4.
A tornado, which is an unusual event in the area, cauused a $5,400 pretax loss.
5.
The income tax rate on all items of income is 30%,
6. The average sharcholders equity is S90,000
Required:
1 Prepare a 2019 multiple-step income statement forHuf
2. Prepare a 2019 retained carnings statement.
3. Compute the 2019 retum on common equity (Net Income 4 Average Sharehokders Equity)
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