ACTG 321 Practice Assignment 1: Income Statement

Due date: see the announcement on D2L                  Name:                                               .       


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* This assignment accounts for 3 extra points. Overdue assignment will not be accepted. No point will be given when proper work/answer is not provided. Points will be deducted for errors.


Presented below is information related to ColorCity Inc. for year of 2020 (1/1/2020-12/31/2020).

Selling and administrative expenses $ 1,114,000
Interest expenses            140,000
Net Sales         3,790,000
Dividends-Common stock              56,000
Income from operations of discontinued food department (pre-tax)             60,000
Interest revenues            260,000
Loss on disposal of discontinued food department (pre-tax)            120,000
Cost of goods sold         1,780,000
Dividends-Preferred stock            125,000
Retained earnings, 1/1            630,000


Use the worksheet provided (see page 2) or use a white paper, then

  1. Calculate the following five subtotals/amounts on a multiple step income statement:

(1) Gross Profit, (2) Income From Operations, (3) Income before tax, (4) Income tax expense, , and (5) Income from continuing operations. Show your work in addition to the answer. Assume a tax rate of 30%.

  1. Prepare in good form a partial multiple-step income statement for the year 2020 for ColorCity Inc. starting from Income from continuing operations. Also include a proper heading.
  2. Assume that 140,000 shares of common stock were outstanding during the year. Calculate earnings per share based on the net income (round to two decimals). Show your work in addition to the answer.

You can type your work by using WORD or do handwriting. Please make your handwriting clear and neat.



ACTG 321  Worksheet for PA1                          Name:                                                    
1.    Calculate the five amounts/subtotals below.














(1)                       ; (2)                       ;(3)                       ; (4)                      ;(5)               .                   .



2. Prepare the partial income statement below. Include a proper heading



  1. Calculate the EPS below.



Answer:                            .

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