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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.
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