Instructions

Prepare in good form a multiple-step income statement for the year 2015. Assume a 30% tax rate and that 80,000 shares of common stock were outstanding during the year.

Presented below is information related to Farr Company.

Retained earnings, December 31, 2014 $ 650,000

Sales revenue 1,500,000

Selling and administrative expenses 240,000

Hurricane loss (pre-tax) on plant (extraordinary item) 290,000

Cash dividends declared on common stock 33,600

Cost of goods sold 880,000

Other revenue 120,000

Other expenses 100,000