| A. | Prepare a multiple-step income statement for the year ended December 31, 2016, concluding with earnings per share. In computing earnings per share, assume that the average number of common shares outstanding was 100,000 and preferred dividends were $100,000. Enter all amounts as positive numbers EXCEPT in the Other income and expenses. In that section only, enter amounts that represent other expenses as negative numbers using a minus sign. Round earnings per share to the nearest cent. | Income Statement data: | | | Advertising expense | $ 150,000 | | Cost of merchandise sold | 3,700,000 | | Delivery expense | 30,000 | | Depreciation expense-office buildings and equipment | 30,000 | | Depreciation expense-store buildings and equipment | 100,000 | | Dividend revenue | 4,500 | | Gain on sale of investments | 4,980 | | Income from Pinkberry Co. investment | 76,800 | | Income tax expense | 140,500 | | Interest expense | 21,000 | | Interest revenue | 2,720 | | Miscellaneous administrative expense | 7,500 | | Miscellaneous selling expense | 14,000 | | Office rent expense | 50,000 | | Office salaries expense | 170,000 | | Office supplies expense | 10,000 | | Sales | 5,254,000 | | Sales commissions | 185,000 | | Sales salaries expense | 385,000 | | Store supplies expense | 21,000 | | Retained earnings and balance sheet data: | | | Accounts payable | $ 194,300 | | Accounts receivable | 545,000 | | Accumulated depreciationoffice buildings and equipment | 1,580,000 | | Accumulated depreciationstore buildings and equipment | 4,126,000 | | Allowance for doubtful accounts | 8,450 | | Available-for-sale investments (at cost) | 260,130 | | Bonds payable, 5%, due 2024 | 500,000 | | Cash | 246,000 | | Common stock, $20 par | | | (400,000 shares authorized; 100,000 shares issued, 94,600 outstanding) | 2,000,000 | | Dividends: | | | Cash dividends for common stock | 155,120 | | Cash dividends for preferred stock | 100,000 | | Goodwill | 500,000 | | Income tax payable | 44,000 | | Interest receivable | 1,125 | | Investment in Pinkberry Co. stock (equity method) | 1,009,300 | | Investments-Dream Inc. bonds (long term) | 90,000 | | Merchandise inventory (December 31, 2016), | | | at lower of cost (FIFO) or market | 778,000 | | Office buildings and equipment | 4,320,000 | | Paid-in capital from sale of treasury stock | 13,000 | | Excess of issue price over par: | | | -Common | 886,800 | | -Preferred | 150,000 | | Preferred 5% stock, $80 par | | | (30,000 shares authorized; 20,000 shares issued) | 1,600,000 | | Premium on bonds payable | 19,000 | | Prepaid expenses | 27,400 | | Retained earnings, January 1, 2016 | 9,319,725 | | Store buildings and equipment | 12,560,000 | | Treasury stock | | | (5,400 shares of common stock at cost of $33 per share) | 178,200 | | Unrealized gain (loss) on available-for-sale investments | (6,500) | | Valuation allowance for available-for-sale investments | (6,500) | |
