The ledger of Port Hope Corporation at November 30, 2021, contains the following summary data Cash dividendscommon $65,000 Operating expenses $1,120,000 Cash dividendspreferred 25,000 Other comprehensive incomeloss on equity investments (before income tax) 83,000 Common shares 325,000 Rent revenue 48,000 Cost of goods sold 7,280,000 Preferred shares ($5 noncumulative) 400,000 Depreciation expense 355,000 Retained earnings, December 1, 2020 755,000 Sales 9,124,000 Your analysis reveals the following additional information 1 The company has a 25 income tax rate 2 The communications devices division was discontinued on August 31 The profit from operations for the division up to that day was $20,000 before income tax The division was sold at a loss of $75,000 before income tax 3 There were 200,000 common and 5,000 preferred shares issued on December 1, 2020, with no changes during the year Prepare a multiple step income statement for the year PORT HOPE CORPORATION Income Statement November 30, 2021Month Ended November 30, 2021Year Ended November 30, 2021 SalesIncome Tax ExpenseOperating ExpensesProfit on Discontinued Operations of Communication Device DivisionCost of Goods Sold $ Operating ExpensesIncome Tax ExpenseCost of Goods SoldProfit on Discontinued Operations of Communication Device DivisionSales Discontinued OperationsEnding Balance, December 31Beginning Balance, November 30ExpensesProfit before Income TaxesComprehensive IncomeTotal ExpensesProfit from Continuing OperationsOther Comprehensive LossTotal Other RevenuesGross ProfitOther RevenuesProfit (Loss)DividendsProfit from Operations Depreciation ExpenseIncome Tax ExpenseLoss on Disposal of Discontinued Communication Device DivisionSalesOperating Expenses $ Income Tax ExpenseSalesDepreciation ExpenseOperating ExpensesLoss on Disposal of Discontinued Communication Device Division Beginning Balance, November 30Profit from OperationsTotal Other RevenuesTotal ExpensesEnding Balance, December 31Discontinued OperationsDividendsExpensesProfit from Continuing OperationsProfit before Income TaxesOther RevenuesProfit (Loss)Gross ProfitOther Comprehensive LossComprehensive Income Discontinued OperationsExpensesProfit before Income TaxesGross ProfitEnding Balance, December 31Total ExpensesDividendsProfit (Loss)Other Comprehensive LossProfit from OperationsTotal Other RevenuesProfit from Continuing OperationsOther RevenuesComprehensive IncomeBeginning Balance, November 30 Discontinued OperationsOther RevenuesExpensesTotal ExpensesGross ProfitDividendsTotal Other RevenuesProfit (Loss)Ending Balance, December 31Beginning Balance, November 30Other Comprehensive LossComprehensive IncomeProfit from OperationsProfit from Continuing OperationsProfit before Income Taxes SalesLoss on Disposal of Discontinued Communication Device DivisionIncome Tax ExpenseOperating ExpensesDepreciation Expense Beginning Balance, November 30Other RevenuesProfit from Continuing OperationsComprehensive IncomeDiscontinued OperationsOther Comprehensive LossGross ProfitExpensesProfit from OperationsProfit before Income TaxesDividendsProfit (Loss)Total Other RevenuesTotal ExpensesEnding Balance, December 31 Discontinued OperationsBeginning Balance, November 30Total ExpensesProfit from Continuing OperationsDividendsComprehensive IncomeGross ProfitProfit from OperationsEnding Balance, December 31Total Other RevenuesExpensesOther RevenuesProfit (Loss)Profit before Income TaxesOther Comprehensive Loss Operating ExpensesSalesProfit on Discontinued Operations of Communication Device DivisionDepreciation ExpenseLoss on Disposal of Discontinued Communication Device Division Profit on Discontinued Operations of Communication Device DivisionSalesDepreciation ExpenseLoss on Disposal of Discontinued Communication Device DivisionOperating Expenses Profit before Income TaxesComprehensive IncomeDividendsDiscontinued OperationsProfit from Continuing OperationsOther RevenuesTotal ExpensesEnding Balance, December 31Other Comprehensive LossBeginning Balance, November 30ExpensesProfit from OperationsGross ProfitProfit (Loss)Total Other Revenues $ Earnings per share $ Prepare a statement of comprehensive income as a separate statement PORT HOPE CORPORATION Statement of Comprehensive Income Month Ended November 30, 2021Year Ended November 30, 2021November 30, 2021 ExpensesBeginning Balance, November 30Discontinued OperationsProfit from Continuing OperationsProfit from OperationsOther RevenuesTotal Other RevenuesTotal ExpensesEnding Balance, December 31Other Comprehensive LossComprehensive IncomeProfit before Income TaxesDividendsProfit (Loss)Gross Profit $ Profit before Income TaxesBeginning Balance, November 30Comprehensive IncomeDividendsGross ProfitTotal ExpensesProfit from Continuing OperationsOther Comprehensive LossDiscontinued OperationsTotal Other RevenuesProfit from OperationsProfit (Loss)ExpensesOther RevenuesEnding Balance, December 31 Profit on Discontinued Operations of Communication Device DivisionLoss on Equity Investments (Net)Gain on Income Tax Savings (Net)Gain on Equity Investments (Net)Loss on Income Tax Savings (Net)

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Aug 08, 2024

The ledger of Port Hope Corporation at November 30, 2021, contains the following summary data: Cash dividendscommon $65,000 Operating expenses $1,120,000 Cash dividendspreferred 25,000 Other

The ledger of Port Hope Corporation at November 30, 2021, contains the following summary data:

Cash dividendscommon	$65,000	Operating expenses	$1,120,000
Cash dividendspreferred	25,000	Other comprehensive incomeloss on equity investments (before income tax)	83,000
Common shares	325,000	Rent revenue	48,000
Cost of goods sold	7,280,000	Preferred shares ($5 noncumulative)	400,000
Depreciation expense	355,000	Retained earnings, December 1, 2020	755,000
Sales	9,124,000

Your analysis reveals the following additional information:

1.		The company has a 25% income tax rate.
2.		The communications devices division was discontinued on August 31. The profit from operations for the division up to that day was $20,000 before income tax. The division was sold at a loss of $75,000 before income tax.
3.		There were 200,000 common and 5,000 preferred shares issued on December 1, 2020, with no changes during the year.

Prepare a multiple-step income statement for the year.

PORT HOPE CORPORATION Income Statement November 30, 2021Month Ended November 30, 2021Year Ended November 30, 2021
SalesIncome Tax ExpenseOperating ExpensesProfit on Discontinued Operations of Communication Device DivisionCost of Goods Sold		$
Operating ExpensesIncome Tax ExpenseCost of Goods SoldProfit on Discontinued Operations of Communication Device DivisionSales
Discontinued OperationsEnding Balance, December 31Beginning Balance, November 30ExpensesProfit before Income TaxesComprehensive IncomeTotal ExpensesProfit from Continuing OperationsOther Comprehensive LossTotal Other RevenuesGross ProfitOther RevenuesProfit / (Loss)DividendsProfit from Operations
Depreciation ExpenseIncome Tax ExpenseLoss on Disposal of Discontinued Communication Device DivisionSalesOperating Expenses	$
Income Tax ExpenseSalesDepreciation ExpenseOperating ExpensesLoss on Disposal of Discontinued Communication Device Division

Beginning Balance, November 30Profit from OperationsTotal Other RevenuesTotal ExpensesEnding Balance, December 31Discontinued OperationsDividendsExpensesProfit from Continuing OperationsProfit before Income TaxesOther RevenuesProfit / (Loss)Gross ProfitOther Comprehensive LossComprehensive Income
Discontinued OperationsExpensesProfit before Income TaxesGross ProfitEnding Balance, December 31Total ExpensesDividendsProfit / (Loss)Other Comprehensive LossProfit from OperationsTotal Other RevenuesProfit from Continuing OperationsOther RevenuesComprehensive IncomeBeginning Balance, November 30
Discontinued OperationsOther RevenuesExpensesTotal ExpensesGross ProfitDividendsTotal Other RevenuesProfit / (Loss)Ending Balance, December 31Beginning Balance, November 30Other Comprehensive LossComprehensive IncomeProfit from OperationsProfit from Continuing OperationsProfit before Income Taxes
SalesLoss on Disposal of Discontinued Communication Device DivisionIncome Tax ExpenseOperating ExpensesDepreciation Expense
Beginning Balance, November 30Other RevenuesProfit from Continuing OperationsComprehensive IncomeDiscontinued OperationsOther Comprehensive LossGross ProfitExpensesProfit from OperationsProfit before Income TaxesDividendsProfit / (Loss)Total Other RevenuesTotal ExpensesEnding Balance, December 31
Discontinued OperationsBeginning Balance, November 30Total ExpensesProfit from Continuing OperationsDividendsComprehensive IncomeGross ProfitProfit from OperationsEnding Balance, December 31Total Other RevenuesExpensesOther RevenuesProfit / (Loss)Profit before Income TaxesOther Comprehensive Loss
Operating ExpensesSalesProfit on Discontinued Operations of Communication Device DivisionDepreciation ExpenseLoss on Disposal of Discontinued Communication Device Division
Profit on Discontinued Operations of Communication Device DivisionSalesDepreciation ExpenseLoss on Disposal of Discontinued Communication Device DivisionOperating Expenses

Profit before Income TaxesComprehensive IncomeDividendsDiscontinued OperationsProfit from Continuing OperationsOther RevenuesTotal ExpensesEnding Balance, December 31Other Comprehensive LossBeginning Balance, November 30ExpensesProfit from OperationsGross ProfitProfit / (Loss)Total Other Revenues		$
Earnings per share		$

Prepare a statement of comprehensive income as a separate statement.

PORT HOPE CORPORATION Statement of Comprehensive Income Month Ended November 30, 2021Year Ended November 30, 2021November 30, 2021
ExpensesBeginning Balance, November 30Discontinued OperationsProfit from Continuing OperationsProfit from OperationsOther RevenuesTotal Other RevenuesTotal ExpensesEnding Balance, December 31Other Comprehensive LossComprehensive IncomeProfit before Income TaxesDividendsProfit / (Loss)Gross Profit		$
Profit before Income TaxesBeginning Balance, November 30Comprehensive IncomeDividendsGross ProfitTotal ExpensesProfit from Continuing OperationsOther Comprehensive LossDiscontinued OperationsTotal Other RevenuesProfit from OperationsProfit / (Loss)ExpensesOther RevenuesEnding Balance, December 31
Profit on Discontinued Operations of Communication Device DivisionLoss on Equity Investments (Net)Gain on Income Tax Savings (Net)Gain on Equity Investments (Net)Loss on Income Tax Savings (Net)