Revenue Statement December 31, 2019 $ 179,000 2,240 7,500) $173,740 (19,000) $ 154,740 Sales (net) Plus: Income from operations of discontinued Division P (net of $960 income taxes) Less: Dividends declared ($1.50 per common share) Net revenues Less: Selling expenses Gross profit Less: Operating expenses: Interest expense Loss on sale of Division P (net of $1,200 income tax credit) Cost of goods sold Income tax expense on income from continuing operations Tolal operating expenses Operating income Miscellaneous items: Dividend revenue General and administrafive expenses Income before unusual items Unusual items: Loss on sale of land Correction of errin last year's income (net of $1,500 income toxes) Net income $ 4,100 2,800 110,700 5,370 (122,970) $31,770 $ 1,800 (24,300) (22,500) $9,270 $ (4,800) 3,500 (1,300) 7,970 Retained Earnings Statement December 31, 2019 Beginning retained earnings Add: Net income Adjusted retained earnings Loss: Loss from theft (net of $2,760 income tax credit) Ending retained earnings $62,850 7,970 $70,820 (6,440) $64,380
Revenue Statement December 31, 2019 $ 179,000 2,240 7,500) $173,740 (19,000) $ 154,740 Sales (net) Plus: Income from operations of discontinued Division P (net of $960 income taxes) Less: Dividends declared ($1.50 per common share) Net revenues Less: Selling expenses Gross profit Less: Operating expenses: Interest expense Loss on sale of Division P (net of $1,200 income tax credit) Cost of goods sold Income tax expense on income from continuing operations Tolal operating expenses Operating income Miscellaneous items: Dividend revenue General and administrafive expenses Income before unusual items Unusual items: Loss on sale of land Correction of errin last year's income (net of $1,500 income toxes) Net income $ 4,100 2,800 110,700 5,370 (122,970) $31,770 $ 1,800 (24,300) (22,500) $9,270 $ (4,800) 3,500 (1,300) 7,970 Retained Earnings Statement December 31, 2019 Beginning retained earnings Add: Net income Adjusted retained earnings Loss: Loss from theft (net of $2,760 income tax credit) Ending retained earnings $62,850 7,970 $70,820 (6,440) $64,380
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Misclassifcations Roz Corporation's Multiple- Step income statement and
You determine that the account balances listed on the statements are correct but are incorrectly calssified in certain cases. The company laces a 30% tax rate. No shares of common stock were issued or retired during 2019
Required:
1. Review both statements and indicate where each incorrectly classified item should be classified.
2 Preoare a correct multiple - step income statement for 2019
3. Determine the correct beginning balance in retained earnings and then prepare a correct 2019 retained earnings statement.
Transcribed Image Text:Revenue Statement
December 31, 2019
$ 179,000
2,240
7,500)
$173,740
(19,000)
$ 154,740
Sales (net)
Plus: Income from operations of discontinued Division P (net of $960 income taxes)
Less: Dividends declared ($1.50 per common share)
Net revenues
Less: Selling expenses
Gross profit
Less: Operating expenses:
Interest expense
Loss on sale of Division P (net of $1,200 income tax credit)
Cost of goods sold
Income tax expense on income from continuing operations
Tolal operating expenses
Operating income
Miscellaneous items:
Dividend revenue
General and administrafive expenses
Income before unusual items
Unusual items:
Loss on sale of land
Correction of errin last year's income (net of $1,500 income toxes)
Net income
$ 4,100
2,800
110,700
5,370
(122,970)
$31,770
$ 1,800
(24,300)
(22,500)
$9,270
$ (4,800)
3,500
(1,300)
7,970
Retained Earnings Statement
December 31, 2019
Beginning retained earnings
Add: Net income
Adjusted retained earnings
Loss: Loss from theft (net of $2,760 income tax credit)
Ending retained earnings
$62,850
7,970
$70,820
(6,440)
$64,380
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