Reference no: EM131872809

Problem - Prepare Multiple-step income statement

Presented below is information related to Farr Company.

Retained earnings, December 31, 2010 $ 650,000

Sales 1,400,000

Selling and administrative expenses 240,000

Hurricane loss (pre-tax) on plant (extraordinary item) 290,000

Cash dividends declared on common stock 33,600

Cost of goods sold 780,000

Gain resulting from computation error on depreciation charge in 2009 (pre-tax) 520,000

Other revenue 120,000

Other expenses 100,000

Instructions - Prepare in good form a multiple-step income statement for the year 2011. Assume a 30% tax rate and that 80,000 shares of common stock were outstanding during the year.