Huff Company presents the following items derived from its December 31, 2019, adjusted trial balance:1. Prepare a 2019 multiple-step income statement for Huff. 2. Prepare a 2019 retaiI1ed earnings statement. 3.Compute the 2019 return on common equity (Net Income 4 Average Shareholders’ Equity). Sales (net)Interest expenseCost of goods sold$124,0003,70066,200Operating expensesCommon stock, $5 parRetained earnings, 1/1/2019$30,40022,00045,800The following information is also available for 2019 and is not reflected in the preceding accounts:1. The common stock has been outstanding all year. A cash dividend of $1.28 per share was declared and paid.2. Land was sold at a pretax gain of $6,300.3. Division X (a major component of the company) was sold at a pretax gain of $4,700. It had incurred a $9,500pretax operating loss during 2019.4. A tornado, which is an unusual event in the area, caused a $5,400 pretax loss.5. The income tax rate on all items of income is 30%.6. The average shareholders’ equity is $90,000.

A multi-step income statement categorizes overall revenue and expenses as operational or…

Answered: Sales (net) Interest expense Cost of…

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter5: The Income Statement And The Statement Of Cash Flows

Section: Chapter Questions

Problem 17E: Income Statement and Retained Earnings Huff Company presents the following items derived from its...

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Huff Company presents the following items derived from its December 31, 2019, adjusted trial balance:

1. Prepare a 2019 multiple-step income statement for Huff. 2. Prepare a 2019 retaiI1ed earnings statement. 3.Compute the 2019 return on common equity (Net Income 4 Average Shareholders’ Equity).

Sales (net)
Interest expense
Cost of goods sold
$124,000
3,700
66,200
Operating expenses
Common stock, $5 par
Retained earnings, 1/1/2019
$30,400
22,000
45,800
The following information is also available for 2019 and is not reflected in the preceding accounts:
1. The common stock has been outstanding all year. A cash dividend of $1.28 per share was declared and paid.
2. Land was sold at a pretax gain of $6,300.
3. Division X (a major component of the company) was sold at a pretax gain of $4,700. It had incurred a $9,500
pretax operating loss during 2019.
4. A tornado, which is an unusual event in the area, caused a $5,400 pretax loss.
5. The income tax rate on all items of income is 30%.
6. The average shareholders’ equity is $90,000.

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