I\'m trying to do this income statement, but can\'t even seem to get started. I
ID: 2386867 • Letter: I
Question
I'm trying to do this income statement, but can't even seem to get started. I have several other problems that are like this one, but would really like to see an end product. It wasn't discussed much in class and I've been searching all dayPresented below is financial information of the Mickey Corporation for 2008
Beginning Retained Earnings, 1/1/08 $950,000
Gain on the Sale of Investments (normal recurring) $110,000
Sales for the Year $30,000,000
Loss Due to Flood Damage (unusual & infrequent) $125,000*
Cost of Goods Sold $21,000,000
Loss on Disposal of Retail Division $450,000
Interest Revenue $70,000
Loss on Operations of Retail Division $460,000
Selling and Administrative Expenses 5,500,000
Dividends Declared on Common Stock $230,000
Write-Off of Goodwill $520,000
Dividends Declared on Preferred Stock $80,000
Federal Income Tax on Operations for 2008 1,600,000
*net of tax
Mickey Corporation decided to discontinue its retail operations and to retain its manufacturing operations. On August 15, Mickey sold the retail operations to Schoen Company. During 2008, there were 250,000 shares of common stock outstanding all year.
Prepare a multiple-step income statement for the year 2008 on a separate Excel spreadsheet as directed in the Problem Set 1 directions.
Explanation / Answer
Please prepare this income statement in Excel spreadsheet:
Amount in $ Income Statement Sales for the year 30,000,000 Less: Cost of goods sold 21,000,000 Less: Loss on operations of retail division 460,000 Less: Selling and Administrative expenses 5,500,000 Operating profit 3,040,000 Add: Gain on sale of investment 110,000 Add: Interest revenue 70,000 Profit before extra ordinary activity 3,220,000 Extraorindary loss: Less: Loss due to flood 125,000 Less: Loss on Disposal of retail division 450,000 Profit before tax 2,645,000 Federal income tax on operations 1,600,000 Net inocme after tax 1,045,000 Opening Retained earning 950,000 Add: Net income after tax 1,045,000 1,995,000 Less: Dividend on common stock 230,000 Less: Dividend on preferred stock 80,000 Less: Goodwill written off 520,000 Closing retained earning 1,165,000