Intermediate Accounting (2nd Edition)
2nd Edition
ISBN: 9780134730370
Author: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella
Publisher: PEARSON
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Textbook Question
Chapter 5, Problem 5.7E
Multiple-step income Statement. Ciara s Cookie Company provided the following accounts from its year-end
Ciara's Cookie Company
Adjusted Trial Balance (Selected Accounts)
For the Current Year Ended
| Account | Debit | Credit |
| Common Stock (no par): Beginning Balance | $ 456,000 | |
| 1,200,950 | ||
| Accumulated Other Comprehensive Income: Beginning Balance | $ 55,675 | |
| Dividends | 57,000 | |
| Sales | 1,200,895 | |
| Interest Income | 3,400 | |
| Dividend Income | 3,250 | |
| Gam on Disposal of Plant Assets | 76,000 | |
| Unrealized Gain on Trading Securities | 27,250 | |
| Gain on Sale of Discontinued Operations—Before Tax | 56,780 | |
| Unrealized Gain on Available for-Sale Bonds—Before Tax | 3,500 | |
| Cost of Goods Sold | 450,000 | |
| Selling Expenses | 37,450 | |
| Office Salaries Expense | 66,000 | |
| Legal Fees—General | 8,000 | |
| Sales Salaries Expense | 73,500 | |
| Advertising Expense | 21,500 |
The company is subject to a 40% income tax rate.
Prepare a multiple-step income statement for the current year.
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Preparing a Single-Step Income Statement
The following items are from the adjusted trial balance of Bailey Corp. on December 31, the end of
its annual accounting period. Assume an average 25% income tax on all items. Weighted average shares
of common stock outstanding for the year were 10,000.
Sales revenue
Depreciation for the period
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$645,200
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2,400
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Prepare a single-step income statement for the 12 months ended December 31, including the earnings per share disclosures. Report income taxes in its own section.
Note: Enter the answer for earnings per share in dollars and cents, rounded to the nearest penny.
Note: Do not enter any negative signs with your answers.
Refer to Mixon Company’s balance sheets in Exercise 1–3. Express the balance sheets in common-size percents. Round to the nearest one-tenth of a percent.
Chapter 5 Solutions
Intermediate Accounting (2nd Edition)
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