Seismic Company Income Statement For the year ended December 31, 2020 Net sales $1,575,000 Costs and expenses Cost of goods sold 475,000 Selling, general and administrative expenses 40,000 Other expenses 25,000 Total costs and expenses 540,000 Income before income taxes 1,035,000 Income taxes 258,750 Net income $776,250 Additional information Selling, general and administrative expenses included a loss of $19,000 due to hurricane damage There was also a gain of $25,000 included which is a result of the state of Indiana purchasing one of their production facilities to make way for Interstate 69 Other expenses consisted of Interest expense, $5,000 Discontinued operations in the current year at a loss of $20,000 before taxes The loss from operations of the discontinued subsidiary was $100,000 before taxes, the gain from the disposal of the subsidiary was $80,000 before taxes On January 1, 2020, Seismic changed from LIFO to FIFO inventory valuation method The cumulative effect for years 2018 and 2019 before taxes of $75,000 results in a reduction to net income Seismic had 50,000 shares of preferred stock and 275,000 shares of common stock outstanding during 2020 and a tax rate of 25 Seismic paid a cash dividend of $16,500 in total to both classes of shareholders $10,500 to preferred shareholders and the remainder to common shareholders Instructions Using the multiple step format, prepare a corrected income statement including the appropriate per share disclosures The corrected income statement will NOT contain an account called other expenses

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Seismic Company Income Statement For the year ended December 31, 2020 Net sales $1,575,000 Costs and expenses: Cost of goods sold 475,000 Selling, general and

Seismic Company

Income Statement

For the year ended December 31, 2020

Net sales		$1,575,000
Costs and expenses:
Cost of goods sold	475,000
Selling, general and administrative expenses	40,000
Other expenses	25,000
Total costs and expenses		540,000
Income before income taxes		1,035,000
Income taxes		258,750
Net income		$776,250

Additional information:

Selling, general and administrative expenses included a loss of $19,000 due to hurricane damage. There was also a gain of $25,000 included which is a result of the state of Indiana purchasing one of their production facilities to make way for Interstate 69.

Other expenses consisted of:
1. Interest expense, $5,000;
2. Discontinued operations in the current year at a loss of $20,000 before taxes. The loss from operations of the discontinued subsidiary was $100,000 before taxes, the gain from the disposal of the subsidiary was $80,000 before taxes.

On January 1, 2020, Seismic changed from LIFO to FIFO inventory valuation method. The cumulative effect for years 2018 and 2019 before taxes of $75,000 results in a reduction to net income.

Seismic had 50,000 shares of preferred stock and 275,000 shares of common stock outstanding during 2020 and a tax rate of 25%.

Seismic paid a cash dividend of $16,500 in total to both classes of shareholders; $10,500 to preferred shareholders and the remainder to common shareholders.

Instructions: Using the multiple-step format, prepare a corrected income statement including the appropriate per share disclosures. The corrected income statement will NOT contain an account called other expenses.