ACCOUNTING QUESTION

See the following Company, Strawberry Inc., and an excerpt of the relevant income statement accounts. Common shares outstanding for 2023 total 40,550. Income tax for the year was $10,070. Instructions (a) Prepare an income statement for the year ended December 31,2023 , using the multiple-step format. Include calculation of EPS. Earnings per share $ (b) Prepare an income statement for the year ended December 31, 2020, using the single-step format. Include calculation of EPS. Multiple-Step Format Strawberry Inc. Income Statement For the Year Ended December 31, 2023 (in thousands, except earnings per share) Revenues Total revenues Expenses Total expenses Income before income tax Income tax Net income Earnings per share $ Mango Co. reported income from continuing operations before tax of $856,000 during 2023 . Additional transactions occurring in 2020 but not included in the $856,000 are as follows: 1. At the beginning of 2021 , the corporation purchased a machine for $60,000 (residual value of $5,000 ) that has a useful life of seven years. The bookkeeper used straight-line depreciation for 2021, 2022, and 2023, but failed to deduct the residual value in calculating the depreciable amount. 2. The sale of FVNI investments resulted in a gain of $107,000. 3. When its president died, the corporation gained $70,000 from an insurance policy. The cash surrender value of this policy had been carried on the books as an investment in the amount of $46,000 (the gain is non-taxable). 4. The corporation disposed of its recreational division at a loss of $45,000 before tax. Assume that this transaction meets the criteria for accounting treatment as discontinued operations. 5. The corporation decided to change its method of inventory pricing from average cost to the FIFO method. The effect of this change on prior years is to increase 2021 income by $50,000 and decrease 2022 income by $30,000 before taxes. The FIFO method has been used for 2023. Instructions: a) Prepare an income statement for the year 2023, starting with income from continuing operations before income tax. Calculate earnings per share as it should be shown on the face of the income statement. There were 80,000 common shares outstanding during the year. (Ignore all tax calculations and implications) b) Assume that beginning retained earnings for 2023 is $2,140,000 and that dividends of $200,000 were declared during the year. Prepare the retained earnings portion of the statement of changes in equity for 2023. Mango Co. Excerpt from Statement of Changes in Equity For the Year Ended December 31, 2023 Retained earnings, January 1, 2023, as reported $2,140,000 Retained earnings, January 1,2023 , as adjusted Add: Less: Retained earnings, December 31, 2023 * Error in calculation of depreciation: As calculated ( $XX,XXX/X) Corrected ($XX,XXX$X,XXX)/X Understatement of net income per year Total understatement of beginning retained earnings *Pre-tax understatement of 2021 income (inventory) Pre-tax overstatement of 2022 income (inventory) Net pre-tax understatement of beginning retained earnings