Question
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) |
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