Preparing an Income Statement and a Statement of Comprehensive Income

The following pretax amounts are taken from the adjusted trial balance of Avoca Auto Corp. at December 31, 2020, its annual year-end.

Sales Revenue $416,000

Cost of good sold 176,000

operating expenses 128,000

gain on debt retirement 32,000

interest expense 12,800

loss from discontinued operations. 80,000

retained earnings balance, December 31, 2019 48,000

dividends declared and paid 40,000

unrealized holding gain on debt investment securities, net of tax 6,400

Common stock, weighted average shares outstanding 16,000 Shares

Required

a. Prepare a single-step income statement. Assume an average 25% tax rate on all items. Include earnings per share disclosures. b. Prepare a comprehensive income statement by showing a separate but consecutive statement of comprehensive income. Ignore earnings per share disclosures. c. Compute the ending retained earnings balance at December 31, 2020.

• Enter revenues and gains and expenses and losses in the order of the largest dollar amount to the smallest dollar amount.
• Do not use negative signs with any of your answers.
• Round the per share amounts to two decimal places.