Selected information about income statement accounts for the Reed Company is presented below (the company's fiscal year ends on December 31): 2021 Sales revenue Cost of goods sold Administrative expense Selling expense Interest revenue Interest expense Loss on sale of assets of discontinued component $4,750, eee 2.930.000 870,eee 430.000 157, eee 214, eee 76,eee 2e2e $3,850, eee 2.07e, eee 745, eee 372.ee 147. eee 214, eee On July 1, 2021, the company adopted a plan to discontinue a division that qualifies as a component of an entity as defined by GAAP. The assets of the component were sold on September 30, 2021, for $76,000 less than their book value. Results of operations for the component (included in the above account balances) were as follows: Sales revenue Cost of goods sold Administrative expense Selling expense Operating income before taxes 1/1/2021-9/30/2021 $ 470,000 (325,000) (57.000) (27,00) $ 61,000 2020 $570,000 (362,000) (47.000) (27,000) $ 134,000 Check m Cost of goods sold Administrative expense Selling expense Operating income before taxes (325, ) (57,880) (27, eee) $ 61, eee (362,088) (47,000) (27,eee) $ 134, eee In addition to the account balances above, several events occurred during 2021 that have not yet been reflected in the above accounts: 1. A fire caused $57,000 in uninsured damages to the main office building. The fire was considered to be an unusual event. 2. Inventory that had cost $47.000 had become obsolete because a competitor introduced a better product. The inventory was wr down to its scrap value of $7,000. 3. Income taxes have not yet been recorded. Required: Prepare a multiple-step income statement for the Reed Company for 2021, showing 2020 information in comparative format, inclus income taxes computed at 25% and EPS disclosures assuming 400,000 shares of outstanding common stock. (Amounts to be deducted should be indicated with a minus sign. Round EPS answers to 2 decimal places.) REED COMPANY Comparative Income Statements For the Years Ended December 31 2021 2020 Pray 1 of 5 8 Next > Return to question 2021 2020 4,280,000 2,605,000 1,675,000 3,280,000 1,708,000 1,572,000 Sales revenue Cost of goods sold Gross profit (loss) Operating expenses: Administrative expense Selling expense Loss on building (fire damage) Loss on inventory write-down 813,000 698,000 403,000 345,000 57.0000 40.000 1,313,000 362,000 1,043,000 529,000 Total operating expenses Operating income Other income (expense): Interest revenue Interest expense Total other income, net Income from continuing operations before income taxes 157,000 (214,000) (57.000) 305,000 147,000 (214,000) (67.000) 462,000
