The following information for the year ending December 31, 2015 has been provided for the Southwest Company.

Cost of Goods Sold	$300,000
Sales	850,000
Income taxesto be determine using the 40% tax rate	???
General and Administrative Expenses	25,000
Gain on sale of short-term (trading) investment	3,000
Depreciation expense using the old estimated useful life	45,000
Sales discounts	3,000
Interest revenue	10,000
Sales returns and allowances	8,000
Officers and Office salaries	205,000
Interest expense	6,000
Dividends	15,000
Retained Earnings as of January 1, 2015	75,000

In addition, the following information has been assembled:

During 2015, Southwest decided to undertake a major restructuring of one of its divisions. As a result, it has been decided that assets with a book value of $100,000 are actually worthless. In addition, Southwest estimates that it will cost a total of $140,000 in the next few years to relocate a number of employees in connection with this restructuring. Southwest decided to record all the estimated restructuring liabilities as expenses in year 2015. Both of these items are considered restructuring costs.

One of Southwests buildings suffered uninsured earthquake damage of $20,000. This is the first earthquake to hit the area in 165 years.

3... On January 1, 2015, Southwest purchased investment securities for $350,000. Southwest intends to hold these securities (classified as available-for-sale) for the foreseeable future. As of December 31, 2015, the securities have a market value of $250,000.

4... Southwest has a foreign subsidiary located in China. During 2015, the Chinese currency (the yuan) declined in value. The effect of this decline was to reduce the U.S. dollar value of the equity of this foreign subsidiary by $60,000.

5... Southwest changed the estimated useful life of its PP&E in 2015. The effect in 2015 was to decrease reported depreciation expense from $45,000 to $35,000.

6... On November 1, 2015, Southwest formally decided to discontinue one of its business segments. None of the other information given in this exercise relates to this discontinued segment. On December 31, 2015, the end of the companys fiscal year, the division had not yet been sold. On that date, the assets of the division had a book value of 70,000 and a fair value, minus the anticipated cost to sell, of 45,000. Operating income for the segment for the entire year of 2015 was $10,000.

7... The income tax rate for ALL items is 40%. The company has 50,000 shares outstanding-do not forget to calculate EPS.

REQUIRED: Prepare two financial statements:

Multi-step Income Statement with EPS disclosures and

Statement of Comprehensive Income for the year ended 2015.

Template given for Income statement and CI by professor

SOUTHWEST COMPANY
Income Statement
For the Year Ended December 31, 2015
Net Sales
Cost of goods sold
Gross profit		0
Operating expenses:
Officers and Office Salaries
Depreication Expense
Other General and Administriative Expenses
Restructuring Costs
Loss from earthquake
Total operating expenses		0
Operating income (Loss)		0
Other income (expense):
Interest Revenue
Gain on sale of short-term investment
Interest Expense
Other income (expense)		$0
Income from continuing operations before income taxes		0
Income tax (expense)/benefit		0
Income from continuing operations		0
Discontinued operations:
Income from operations of discontinued component
(including impairment loss of $xx,xxx)
Income tax expense	-
Income on discontinued operations		0
Net income (loss)		0
Earnings per share:*
Income from continuing operations (xx,xxx/50,000)	$0.00
Discontinued operations (xx,xxx/50,000)	-
Net income (xx,xxx/50,000)	$0.00
Number of shares outstanding	50,000
THE STONE COMPANY
Statement of Comprehensive Income
For the Year Ended December 31, 2015
Net income (Loss)		$0
Other comprehensive income (loss):
Unrealized loss from investments, net of tax	-
Loss from foreign currency translation, net of tax	-
Total other comprehensive income		-
Comprehensive income (loss)		$0