The ledger of Coquitlam Corporation at December 31, 2021, contains the following summary data:

Your analysis reveals the following additional information:

1. The company has a 25% income tax rate.

2. The ceramics division was discontinued on July 31. The loss from operations for the division up to that day was $150,000 before income tax. The division was sold at a pre-tax gain of $70,000 before income tax.

3. There were 200,000 common and 100,000 noncumulative preferred shares issued on December 31, 2020, with no changes during the year.

Instructions

a. Prepare a multiple-step income statement for the year.

b. Prepare a statement of comprehensive income as a separate statement.

Taking It Further

What are the characteristics of a component of an entity? What information does profit (loss) from continuing operations provide to a user? What information does profit (loss) from discontinued operations provide to a user?

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Cash dividends-common Cash dividends-preferred Cost of goods sold Sales Operating expenses $ 125,000 Other comprehensive income-holding gain on equity investments (before income tax) $ 47,000 888,000 Other expenses 1,750,000 Retained earnings, January 1, 2021 451,000 642,000