ACTG 321 Practice Assignment 1: Income Statement
Due date: see the announcement on D2L Name: .
* 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 |
Instruction:
Use the worksheet provided (see page 2) or use a white paper, then
- 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%.
- 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.
- 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.
Answer: (1) ; (2) ;(3) ; (4) ;(5) . .
2. Prepare the partial income statement below. Include a proper heading |
- Calculate the EPS below.
Answer: .
