AutoSave OFF HES 5 = 1-15.01Student Home Insert Draw Page Layout Formulas Data Review View Tell me Share 0 Comments Calibri (Body) 10 v - AP = = 20 ab Wrap Text Eu 28-0 General HA VITX 5 Paste BI ar Av Merge & Center $ % % , Insert Delete Format Ideas .000 Conditional Format Cell Formatting as Table Styles Sort & Filter Find & Select Open recovered workbooks? Your recent changes were saved. Do you want to continue working where you left off? Yes No F11 F G H I J K L M N N O P Q R S T U A B Stearns Corporation was a diversified company with two separate lines of business-chemicals and financial services. At the beginning of 20X7, a strategic shift resulted in Stearns selling its financial services unit, resulting in a $3,000,000 pretax gain. The following additional transactions and events pertain to 20x7: 1 The chemical unit sold a paint factory at pretax loss of $500,000. This asset sale did not represent a strategic shift a for Stearns. 2 General information for 20x7 is as follows: Sales, $7,500,000; Cost of Goods Sold, $3,200,000; Selling Expenses, $1,000,000; and General & Administrative Expenses, $1,500,000. The company's income tax rate is 30%. 3 Stearns changed its method of accounting for inventory at the beginning of 20x7. The cost of goods sold of $3,200,000 is based on the new method. Cumulatively, prior years' income would have been $2,400,000 higher (net of tax effects) had the new method been in use all along. The company discovered an error in a prior year's report. The error resulted in a $420,000 overstatement of 20x5 net income. 5 6 (a) 7 (6) Prepare the 20x7 income statement for Stearns Corporation. Retained earnings at January 1, 20x7, was $5,500,000 before giving consideration to the correction of error or accounting change described above. What is the balance of the revised beginning retained earnings? 8 (c) If the company had $400,000 of other comprehensive income (net of any tax effects) related to holding gains on available for sale securities, how much is total comprehensive income?" O # 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Problem Worksheet + Enter 100% AutoSave OFF Esvu = 1-15.01Student Q Home Insert Draw Page Layout Formulas Data Review View Tell me Share 0 Comments Calibri (Body) v 10 ~ Ai = ab Wrap Text General PA EL : Ayu O 5 Paste a. A v B I U Insert $ % ) Merge & Center .00 .00 0 Delete Format Ideas Conditional Format Cell Formatting as Table Styles Sort & Filter Find & Select Yes No Open recovered workbooks? Your recent changes were saved. Do you want to continue working where you left off? A1 X fx (a) FCH T D E L M M N O P Q R S T U V W X Y 1. (a) 3 4 5 8 $ 9 $ 10 11 12 13 14 $ 15 16 11 $ $ 17 18 19 20 21 22 23 25 26 (b) 27 28 (c) 29 30 31 32 33 34 35 36 37 38 39 40 41 Problem Worksheet + Ready 6 P 100%
