Question 14-4B

Preparing a single-step income Statement Problem 14-43 The information below was taken from the ledger and other records of Make a Statement Inc. at September 30, 2017: General expenses S 220,000 Loss on sale of discontinued segment 18,000 Cost of goods sold 570,000 Income tax expertise (saving) Continuing operations 44.000 Discontinued segment: Operating income 2,000 Loss on sale (6,000) Interest expense 27,000 Gain on settlement of lawsuit 27,000 Sales returns 23,000 Contributed surplus from repurchase of preferred shares 18,000 Sales discounts 7.000 Sales revenue 1,000,000 Operating income, discontinued segment 8.000 Loss on sale of property, plant, and equipment 5,000 Dividends on preferred shares 12,500 Preferred shares, 50.50, cumulative, 50.000 shares authorized 25,000 shares issued and outstanding 350,000 Dividends on common shares 25,000 Retained earnings, October 1, 2016 197.000 Selling expenses 33,000 Common shares, unlimited shares authorized, 40,000 shares issued and outstanding 433,000 Required Prepare a single-step income statement, including camnings per share, for Make a Statement Inc. for the fiscal year ended September 30, 2017. Evaluate income for the year ended September 30, 2017, in terms of the outlook for 2018. Assume 2017 was a typical year and that Make a Statement's managers hoped to earn income from continuing operations qual to 12 percent of net sales Problem 14-58 The capital structure of Redding Design Ltd. at December 31, 2016, included 15,000, 51 pre- ferred shares and 420.000 common shares. Common shares outstanding during 2017 were 330,000 in January through March: 348,000 during April: 385,000 May through September and 420.000 during October through December. Income from continuing operations dur ing 2017 was 5446,000. The company discontinued a segment of the business at a gain of $61,500. The board of directors of Redding Design Ltd. has restricted $82,500 of retained earnings for expansion of the company's office facilities Computing earnings per share and reporting a retained eam ings restriction Required 1. Compute Redding Design Ltd.'s eamings per share. Start with income from continuing operations. Income and loss amounts are net of income tax. 2. Show two ways of reporting Redding Design Ltd's retained earnings restriction Retained Earnings at December 31, 2016, was 5172,000, and total contributed capital at December 31, 2017, is $575,000. Redding Design Ltd. declared cash dividends of $250,000 during 2017 828 Part 3 Accounting for Partnerships and Corporate Transactions