PROTECTED VIEW Be careful-files from the Internet can contain viruses. UTISS NEED - XV fx IC 6B Information XYZ's beginning balance in retained earnings was $1.940,000. The beginning balance in plant, property. 1 and equipment (PP&E) was $14,500,000. The beginning balance in accumulated depreciation was $4,750,000 On January 1, 2018, XYZ announced it was discontinuing all operations east of the Mississippi River. The assets associated with the discontinued operations had a combined cost of $4,500,000 and associated accumulated depreciation of $2,250,000. Before the discontinued assets were sold for $3,000,000 on July 1, XYZ lost $900,000 on operations east of the Mississippi Revenge on continuing operations, west of the Mississippi, was $9,000,000 for 2018. Cost of goods sold was $5,000,000. Operating expenses other than deprecation was $2,750,000. 5 Depreciation on the west of the Mississippi assets was calculated on an expected life of 16 years. As of 1/1/2018, these assets were 4 years old on average. Unfortunately, the previous accountant forgot to include $2,000,000 in expected salvage value for these calculations 11 12 6 XYZ has also determined that the original expected salvage value is still reasonable, but that the total expected life of the assets should have been 20 years, ie, these assets are expected to last another 16 years 13 XYZ earned $360,000 in rental income and incurred $480,000 in interest expense for the year. 157 16 XYZ had 1,000,000 shares of common stock and 500,000 shares of preferred stock outstanding for 2018 8 XYX declared and paid dividends of $0.40 per share on the common stock and $0.60 per share on the preferred stock 17 19 9 XYZ's tax rate was 30% 10 Prepare XYZ's statement of retained earnings and multi-step income statement for 2018 in good form IC 6A IC 6B info IC 6 statements Type here to search XYZ Statement of Retained Earnings For Year Ending 12/31/2016 5. Beginning balance as reported 6 Correction of excess depreciation net of tax 7 Correct beginning balance 8 Plus net income 9 Less common dividends 10 Less preferred dividends 11 Ending balance BEEG XYZ Income Statement For Year Ending 12/31/2016 18 Revenue from continuing operations 19 Cost of goods sold 20 Gross profit 21 Operating expenses other tan depreciation 22 Depreciation expense 23 Operating income from continuing operations 24 Plus rental revenue 25 Less interest expense 26 Taxable income from continuing operations 27 Income tax expense 28 Net income from continuing operations 29 Less loss on operating discontinue operations net of tax 30 Plus gain on sale of assets from discontinued operations net of tax 31 Net income 33 Earning per share from continued operations 34 Loss per share on discontinued operations 35 Gain per share on sale of discontinued operations 36 Net earnings per Share