Question
Selected information about income statement accounts for the Reed Company is presented below (the company's fiscal year ends on December 31): 20212020Sales revenue$5,150,000$4,250,000Cost of goods
Selected information about income statement accounts for the Reed Company is presented below (the company's fiscal year ends on December 31):
20212020Sales revenue$5,150,000$4,250,000Cost of goods sold3,010,0002,150,000Administrative expense950,000825,000Selling expense510,000452,000Interest revenue165,000155,000Interest expense230,000230,000Loss on sale of assets of discontinued component108,000
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 $108,000 less than their book value. Results of operations for the component (includedin the above account balances) were as follows:
1/1/2021-9/30/20212020Sales revenue$550,000$650,000Cost of goods sold(365,000)(410,000)Administrative expense(65,000)(55,000)Selling expense(35,000)(35,000)Operating income before taxes$85,000$150,000
In addition to the account balances above, several events occurred during 2021 that have not yet been reflected in the above accounts:
- A fire caused $65,000 in uninsured damages to the main office building. The fire was considered to be an unusual event.
- Inventory that had cost $55,000 had become obsolete because a competitor introduced a better product. The inventory was written down to its scrap value of $6,000.
- Income taxes have not yet been recorded.
how do I do a multiple-step income statement for the Reed Company for 2021, showing 2020 information in comparative format, including income taxes computed at 25% and EPS disclosures assuming 800,000 shares of outstanding common stock.(Amounts to be deducted should be indicated with a minus sign. Round EPS answers to 2 decimal places.)
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