Expert Answers

The following information was taken from the records of Gibson Inc. for the year 2010. Income tax applicable to income from continuing operations $119,000; income tax applicable to loss on discontinued operations $25,500; income tax applicable to extraordinary gain $32,300; income tax applicable to extraordinary loss $20,400; and unrealized holding gain on available
for- sale securities $15,000.
Income tax applicable to:
Income from continuing operations                      $119,000
Loss on discontinued operations                              $25,500
Extraordinary gain                                                       $32,300
Extraordinary loss                                                        $20,400
Unrealized holding gain on

Available- for-sale securities                                      $15,000
Extraordinary gain                                                       $95,000
Loss on discontinued operations                              $75,000
Administrative expenses                                          $240,000
Rent revenue                                                                $40,000
Extraordinary loss                                                        $60,000
Cash dividends declared                                           $150,000
Retained earnings, January 1, 2010                        $600,000
Cost of goods sold                                                      $850,000
Selling expenses                                                          $300,000
Sales                                                                           $1,700,000

Shares outstanding during 2010 were 100,000.

a. Prepare a single-step income statement for 2010. (Round per share common stock to 2 decimal places, e.g. 5.25 and all other answers to zero decimal places, e.g. 2,250. For per share common stock use either a negative sign preceding the number, e.g.
0.45 or parenthesis, e.g. (0.45) for negative numbers. Enter all other amounts as positive amounts and subtract where necessary. List multiple entries from largest to smallest amount, e.g. 10, 5, 2.)

b. Prepare a retained earnings statement for 2010. (Enter all amounts as positive amounts and subtract where necessary.)