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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 $4,700,000 $3,800,000 2,060,000 Sales revenue Cost of goods sold Administrative expense Selling expense Operating income before taxes 2,920,000 860,000 420,000 156,000 212,000 72,000 1/1/2024-9/30/2024 $ 460,000 (320,000) (56,000) (26,000) $50,000 135,000 362,000 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 $72,000 less than their book value. Results of operations for the component (included in the above account balances) were as follows: 146,000 212,000 2023 $ 560,000 (356,000) (46,000) (26,000) $ 132,000 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 $56,000 in uninsured damages to the main office building. The fire was considered to be an unusual event. 2. Inventory that had cost $46,000 had become obsolete because a competitor introduced a better product. The inventory was written down to its scrap value of $6,000. 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 500.000 shares of outstanding common stock. Note: Round EPS answers to 2 decimal places.

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 $4,700,000 $3,800,000 2,060,000 Sales revenue Cost of goods sold Administrative expense Selling expense Operating income before taxes 2,920,000 860,000 420,000 156,000 212,000 72,000 1/1/2024-9/30/2024 $ 460,000 (320,000) (56,000) (26,000) $50,000 135,000 362,000 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 $72,000 less than their book value. Results of operations for the component (included in the above account balances) were as follows: 146,000 212,000 2023 $ 560,000 (356,000) (46,000) (26,000) $ 132,000 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 $56,000 in uninsured damages to the main office building. The fire was considered to be an unusual event. 2. Inventory that had cost $46,000 had become obsolete because a competitor introduced a better product. The inventory was written down to its scrap value of $6,000. 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 500.000 shares of outstanding common stock. Note: Round EPS answers to 2 decimal places.

Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter22: Accounting For Changes And Errors.
Section: Chapter Questions
Problem 4RE: Refer to RE22-2. Assume Heller Company had sales revenue of 510,000 in 2019 and 650,000 in 2020....
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Gross profit (loss) Operating expenses: Total operating expenses Operating income Other income (expense): REED COMPANY Comparative Income Statements For the Years Ended December 31 Total other income, net Income from continuing operations before income taxes Income from continuing operations Discontinued operations: Income (loss) from operations of discontinued component Income (loss) on discontinued operations Net income Earnings per share: Net income 2024 2023
Transcribed Image Text:Gross profit (loss) Operating expenses: Total operating expenses Operating income Other income (expense): REED COMPANY Comparative Income Statements For the Years Ended December 31 Total other income, net Income from continuing operations before income taxes Income from continuing operations Discontinued operations: Income (loss) from operations of discontinued component Income (loss) on discontinued operations Net income Earnings per share: Net income 2024 2023
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 $4,700,000 $3,800,000 2,920,000 2,060,000 735,000 362,000 146,000 212,000 Sales revenue Cost of goods sold Administrative expense Selling expense Operating income before taxes 860,000 420,000 156,000 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 $72,000 less than their book value. Results of operations for the component (included in the above account balances) were as follows: 1/1/2024-9/30/2024 $ 460,000 (320,000) (56,000) (26,000) $ 58,000 212,000 72,000 2023 $ 560,000 (356,000) (46,000) (26,000) $ 132,000 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 $56,000 in uninsured damages to the main office building. The fire was considered to be an unusual event. 2. Inventory that had cost $46,000 had become obsolete because a competitor introduced a better product. The inventory was written down to its scrap value of $6,000. 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 500.000 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 $4,700,000 $3,800,000 2,920,000 2,060,000 735,000 362,000 146,000 212,000 Sales revenue Cost of goods sold Administrative expense Selling expense Operating income before taxes 860,000 420,000 156,000 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 $72,000 less than their book value. Results of operations for the component (included in the above account balances) were as follows: 1/1/2024-9/30/2024 $ 460,000 (320,000) (56,000) (26,000) $ 58,000 212,000 72,000 2023 $ 560,000 (356,000) (46,000) (26,000) $ 132,000 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 $56,000 in uninsured damages to the main office building. The fire was considered to be an unusual event. 2. Inventory that had cost $46,000 had become obsolete because a competitor introduced a better product. The inventory was written down to its scrap value of $6,000. 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 500.000 shares of outstanding common stock Note: Round EPS answers to 2 decimal places.
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