Chapter 12 Special Income and Investment Reporting Issues 571Loss from fixed asset impairment $ 90,000
Miscellaneous administrative expense 7,500
Miscellaneous selling expense 5,500
Office salaries expense 60,000
Rent expense 29,000
Restructuring charge 150,000
Sales 980,000
Sales commissions expense 145,000
Unrealized gain (net of tax) on temporary investments 25,000Instructions
Prepare a multiple-step income statement, concluding with a section for earnings per share in
the form illustrated in this chapter. There were 75,000 shares of common stock (no preferred)
outstanding throughout the year. Assume that the loss on the condemnation of land is an ex-
traordinary item.The following data were taken from the records of Skate N’ Ski Corporation for the year ended
October 31, 2006:Income statement data:
Administrative expenses $ 100,000
Cost of merchandise sold 732,000
Gain on condemnation of land 60,000
Income tax:
Applicable to continuing operations 206,000
Applicable to loss from discontinued operations 28,800
Applicable to gain on condemnation of land 24,000
Interest expense 8,000
Interest revenue 5,000
Loss from discontinued operations 76,800
Loss from fixed asset impairment 200,000
Restructuring charge 90,000
Sales 2,020,000
Selling expenses 400,000Retained earnings and balance sheet data:
Accounts payable $ 89,500
Accounts receivable 309,050
Accumulated depreciation 3,050,000
Accumulated other comprehensive loss 24,000
Allowance for doubtful accounts 21,500
Cash 145,500
Common stock, $15 par (400,000 shares authorized; 152,000 shares issued) 2,280,000
Deferred income taxes payable (current portion, $4,700) 25,700
Dividends:
Cash dividends for common stock 40,000
Cash dividends for preferred stock 100,000
Stock dividends for common stock 60,000
Dividends payable 30,000
Employee termination benefit obligation (current) 60,000
Equipment 9,541,050
Income tax payable 55,900
Interest receivable 2,500
Merchandise inventory (October 31, 2006), at lower of cost (FIFO) or market 425,000
Notes receivable 77,500
Paid-in capital from sale of Treasury stock 16,000
Paid-in capital in excess of par—common stock 894,750
Paid-in capital in excess of par—preferred stock 240,000Alternate Problem
12-2B
Income statement, retained
earnings statement, balance
sheet
Goals1, 2, 3
Net income, $277,000
(continued)