Retained earnings and multiple-step income statement

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Reference no: EM13529504

(Multiple-Step Statement with Retained Earnings) Presented below is information related to Brokaw Corp. for the year 2012.

Net sales

$1,200,000  

Write-off of inventory due to   obsolescence

$   80,000

Cost of goods sold

780,000  

Depreciation expense omitted by   accident in 2011

40,000  

Selling expenses

65,000  

Casualty loss (extraordinary   item) before taxes

50,000  

Administrative expenses

48,000  

Cash dividends declared

45,000  

Dividend revenue

20,000  

Retained earnings at December   31, 2011

980,000  

Interest revenue

7,000  

Effective tax rate of 34% on   all items

 

Instructions

(a) Prepare a multiple-step income statement for 2012. Assume that 60,000 shares of common stock are outstanding.

(b) Prepare a retained earnings statement for 2012.

Reference no: EM13529504

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