Question
Income Statement and Retained Earnings The Huff Company presents the following partial list of account balances taken from its December 31, 2016 adjusted trial balance:
Income Statement and Retained Earnings The Huff Company presents the following partial list of account balances taken from its December 31, 2016 adjusted trial balance:
Sales (net) | $124,000 | Operating expenses | $20,000 | ||
Interest expense | 3,100 | Common stock, $5 par | 16,500 | ||
Cost of goods sold | 56,000 | Retained earnings, 1/1/2016 | 44,500 |
The following information is also available for 2016 and is not reflected in the preceding accounts:
The common stock has been outstanding all year. A cash dividend of $1.46 per share was declared and paid.
Land was sold at a pretax gain of $7,100.
Division X (a major component of the company) was sold at a pretax gain of $4,600. It had incurred a $9,430 pretax operating loss during 2016.
A tornado, which is an unusual event in the area, caused a $5,380 pretax loss.
The income tax rate on all items of income is 30%.
The average shareholders' equity is $90,000.
Required:
1. Prepare a 2016 multiple-step income statement for Huff. Round earnings per share computations to two decimal places.
HUFF COMPANY | ||
Income Statement (Multi-Step) | ||
For Year Ended December 31, 2016 | ||
$ | ||
$ | ||
$ | ||
Other items | ||
$ | ||
$ | ||
$ | ||
Results from discontinued operations | ||
$ | ||
$ | ||
Components of Income | EPS | |
$ | ||
$ |
2. Prepare a 2016 retained earnings statement.
HUFF COMPANY | |
Statement of Retained Earnings | |
For Year Ended December 31, 2016 | |
$ | |
$ | |
$ |
3. Compute the 2016 return on common equity. Round to one decimal place.
%
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