E4-6 (Multiple-step and extraordinary Items) The following balances were taken from the books of Maria Conceit Alonzo Corp. on December 31, 2014: (see attached file)

\fSOLUTION Maria Conchita Alonzo Corp. Income Statement For the Year Ended December 31, 2014 Sales Revenue Sales Less: Sales returns and allowances Sales discounts Net sales revenue Cost of goods sold Gross profit on sales Operating Expenses Selling expenses Admin. and general expenses Income from operations $1,380,000 $150,000 $45,000 $194,000 $97,000 Other Revenues and Gains Interest revenue $291,000 $273,000 $86,000 $359,000 Other Expenses and Losses Interest expense Income before tax and extraordinary item Less: Income taxes @ 34% Income before extraordinary item Extraordinary item - loss from earthquake damage Less: Tax deduction @ 34% Net income $195,000 $1,185,000 $621,000 $564,000 $60,000 $299,000 $101,660 $197,340 $150,000 $51,000 $99,000 $98,340 Per share of common stock: Income before extraordinary item ($197,340 / 100,000) Extraordinary item (net of tax) ($99,000 / 100,000) Net income ($98,340 / 100,000) $1.97 ($0.99) $0.98 SOLUTION Maria Conchita Alonzo Corp. Income Statement For the Year Ended December 31, 2014 Sales Revenue Sales Less: Sales returns and allowances Sales discounts Net sales revenue Cost of goods sold Gross profit on sales Operating Expenses Selling expenses Admin. and general expenses Income from operations $1,380,000 $150,000 $45,000 $194,000 $97,000 Other Revenues and Gains Interest revenue $291,000 $273,000 $86,000 $359,000 Other Expenses and Losses Interest expense Income before tax and extraordinary item Less: Income taxes @ 34% Income before extraordinary item Extraordinary item - loss from earthquake damage Less: Tax deduction @ 34% Net income $195,000 $1,185,000 $621,000 $564,000 $60,000 $299,000 $101,660 $197,340 $150,000 $51,000 $99,000 $98,340 Per share of common stock: Income before extraordinary item ($197,340 / 100,000) Extraordinary item (net of tax) ($99,000 / 100,000) Net income ($98,340 / 100,000) $1.97 ($0.99) $0.98