The following information is related to Dickinson Company for 2020. Retained earnings balance, January 1, 2020 Gain on the sale of investments Net sales Cost of goods sold Loss on disposal of wholesale division Interest revenue Loss on operations of wholesale division Selling and administrative expenses Dividends declared on common stock Write off of goodwill Dividends declared on preferred stock Loss due to flood damage Effective tax rate on all items is 20% $980,000 110,000 25,000,000 16,000,000 550,000 70,000 112.500 4,700,000 250,000 820,000 81.000 390,000 Dickinson Company decided to discontinue its entire wholesale operations and to retain their manufacturing operations. On July 1, Martin sold the wholesale operations to Rogers Company During 2020, there were 500,000 shares of common stock outstanding all year. Instructions a. Prepare a multiple-step income statement for 2020 (in good form). b. Assuming net income for 2020 is $2,053,500 and that income of S118,750 was omitted in error from the 2019 income statement, prepare a retained earnings statement in good form for 2020. PROBLEM BBB: GATOR COMPANY (30 points) Classify each of the transactions listed below as an Operating. Investing, Financing, or Significant Noncash Activity. a. Depreciation of machinery. b. Payment of cash dividends. e. Purchase of land and building. d. Purchase of treasury stock. e. Amortization of patent. f. Decrease in accounts payable during the year. g. Issuance of bonds for plant assets. h. Increase in accounts receivable during the year. i. Redemption of bonds. j. Issuance of capital stock. Spring 2020 Page 3 of 6 The following information is related to Dickinson Company for 2020. Retained earnings balance, January 1, 2020 Gain on the sale of investments Net sales Cost of goods sold Loss on disposal of wholesale division Interest revenue Loss on operations of wholesale division Selling and administrative expenses Dividends declared on common stock Write off of goodwill Dividends declared on preferred stock Loss due to flood damage Effective tax rate on all items is 20% $980,000 110,000 25,000,000 16,000,000 550,000 70,000 112.500 4,700,000 250,000 820,000 81.000 390,000 Dickinson Company decided to discontinue its entire wholesale operations and to retain their manufacturing operations. On July 1, Martin sold the wholesale operations to Rogers Company During 2020, there were 500,000 shares of common stock outstanding all year. Instructions a. Prepare a multiple-step income statement for 2020 (in good form). b. Assuming net income for 2020 is $2,053,500 and that income of S118,750 was omitted in error from the 2019 income statement, prepare a retained earnings statement in good form for 2020. PROBLEM BBB: GATOR COMPANY (30 points) Classify each of the transactions listed below as an Operating. Investing, Financing, or Significant Noncash Activity. a. Depreciation of machinery. b. Payment of cash dividends. e. Purchase of land and building. d. Purchase of treasury stock. e. Amortization of patent. f. Decrease in accounts payable during the year. g. Issuance of bonds for plant assets. h. Increase in accounts receivable during the year. i. Redemption of bonds. j. Issuance of capital stock. Spring 2020 Page 3 of 6
