fatement, Lower Portion the beginning of 2019, Cameron Company's retained earnings was $239,400. For 2019, Cameron has calculated its pretax income from continuing operations to be $158,400. During 2019, the following events also occurred: During July, Cameron sold Division M (a component of the company). It has determined that the pretax income from the operations of Division M during 2019 totals $46,800 and that a pretax loss of $47,600 was incurred on the sale of Division M. - Cameron had 28,000 shares of common stock outstanding during all of 2019. It declared and paid a $2 per share cash dividend on this stock. equired: ssuming that all the pretax items are subject to a 30% income tax rate: Complete the lower portion of Cameron's 2019 income statement, beginning with "Pretax Income from Continuing Operations." Round earnings per share computations to two decimal places. CAMERON COMPANY Pretax income from continuing operations Income tax expense ✓ Income from continuing operations ✔ Results from discontinued operations Income from operations of discontinued Division M (net of income taxes) ✔ Loss on sale of Division M (net of income tax credit) ✔ Partial Income Statement For Year Ended December 31, 2019 Net income ✓ Components of Income Income from continuing operations ✔ Results from discontinued operations ✔ Net income Feedback Check My Work ✓ 00 000000001 2. Prepare an accompanying statement of retained earnings for the year ended December 31, 2019. CAMERON COMPANY Statement of Retained Earnings For Year Ended December 31, 2019
fatement, Lower Portion the beginning of 2019, Cameron Company's retained earnings was $239,400. For 2019, Cameron has calculated its pretax income from continuing operations to be $158,400. During 2019, the following events also occurred: During July, Cameron sold Division M (a component of the company). It has determined that the pretax income from the operations of Division M during 2019 totals $46,800 and that a pretax loss of $47,600 was incurred on the sale of Division M. - Cameron had 28,000 shares of common stock outstanding during all of 2019. It declared and paid a $2 per share cash dividend on this stock. equired: ssuming that all the pretax items are subject to a 30% income tax rate: Complete the lower portion of Cameron's 2019 income statement, beginning with "Pretax Income from Continuing Operations." Round earnings per share computations to two decimal places. CAMERON COMPANY Pretax income from continuing operations Income tax expense ✓ Income from continuing operations ✔ Results from discontinued operations Income from operations of discontinued Division M (net of income taxes) ✔ Loss on sale of Division M (net of income tax credit) ✔ Partial Income Statement For Year Ended December 31, 2019 Net income ✓ Components of Income Income from continuing operations ✔ Results from discontinued operations ✔ Net income Feedback Check My Work ✓ 00 000000001 2. Prepare an accompanying statement of retained earnings for the year ended December 31, 2019. CAMERON COMPANY Statement of Retained Earnings For Year Ended December 31, 2019
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:2. Prepare an accompanying statement of retained earnings for the year ended December 31, 2019.
CAMERON COMPANY
Statement of Retained Earnings
For Year Ended December 31, 2019
✓
Retained earnings, 1/1/2019
Add: Net income for 2019-
Less: Cash dividends ✓
Retained earnings, 12/31/2019 ✓
Although not a required financial statement, whenever a corporation issues an income statement and a balance sheet, it may include a schedule that reconciles the beginning retained earnings balance with the ending retained earnings balance. Some smaller companies report this
schedule as a separate financial statement, called the statement of retained earnings. More often, companies report this reconciliation within the statement of shareholders' equity.
Example of a reconciliation of retained earnings:
Banner Corporation
Reconciliation of Retained Earnings
For the Year Ended December 31, 2019
Retained earnings, January 1, 2019
Add: Prior period adjustment, correction of understatement of 2012
ending inventory (net of $1,500 income taxes)
Adjusted retained earnings, January 1, 2019
Add: Net income
Less: Cash dividends declared, $0.50 per share
Retained earnings, December 31, 2019
$68,150
3,500
$71,650
9,450
(2,500)
$78,600
Transcribed Image Text:Income Statement, Lower Portion
At the beginning of 2019, Cameron Company's retained earnings was $239,400. For 2019, Cameron has calculated its pretax income from continuing operations to be $158,400. During 2019, the following events also occurred:
1. During July, Cameron sold Division M (a component of the company). It has determined that the pretax income from the operations of Division M during 2019 totals $46,800 and that a pretax loss of $47,600 was incurred on the sale of Division M.
2. Cameron had 28,000 shares of common stock outstanding during all of 2019. It declared and paid a $2 per share cash dividend on this stock.
Required:
Assuming that all the pretax items are subject to a 30% income tax rate:
1. Complete the lower portion of Cameron's 2019 income statement, beginning with "Pretax Income from Continuing Operations." Round earnings per share computations to two decimal places.
CAMERON COMPANY
Partial Income Statement
For Year Ended December 31, 2019
Pretax income from continuing operations
Income tax expense
✓
Income from continuing operations ✔
Results from discontinued operations
Income from operations of discontinued Division M (net of income taxes) ✓
Loss on sale of Division M (net of income tax credit)
✓✔
Net income
✓
Components of Income.
Income from continuing operations
Results from discontinued operations
Net income ✓
✓
00
Statement of Retained Earnings
For Year Ended December 31, 2019
1000 100 000
2. Prepare an accompanying statement of retained earnings for the year ended December 31, 2019.
CAMERON COMPANY
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