In 2017, Randa Merchandising, Inc., sold its interest in a chain of wholesale ou
ID: 2328206 • Letter: I
Question
In 2017, Randa Merchandising, Inc., sold its interest in a chain of wholesale outlets, taking the company completely out of the wholesaling business. The company still operates its retail outlets. A listing of the major sections of an income statement follows: Item Debit Credit 1. Net sales 2. Gain on state's condemnation of company property, net of tax 3. Cost of goods sold 4. Income taxes expense 5. Depreciation expense 6. Gain on sale of wholesale business segment, net of tax 7. Loss from operating wholesale business segment, net of tax 8. Loss of assets from meteor strike, net of tax $2,920,000 266,000 $1,490,207 219,000 245,000 752,500 445,000 650,000Explanation / Answer
RANDA MERCHANDISING, INC Income Statement For the Year ended December 31 2017 Net Sales Expenses 2920000 Cost of Goods Sold 1490207 Depreciation Expense 245000 Total Operating Expense 1735207 1184793 other unusual and infrequent gains (losses) Gain on state's condemnation of company property, net of tax 266000 Loss of assets from meteor strike, net of tax -650000 Income from continuing operation before taxes 800793 Income tax expense 219000 Income form continuing operation 581793 Discontinued Segment Loss from operating wholesale business segment, net of tax -445000 Gain on sale of wholesale business segment, net of tax 752500 307500 Net income 889293