Huff Company presents the following items derived from its December 31, 2016, adjusted trial balance:
The following information is also available for 2016 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 2016.
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.
1. Prepare a 2016 multiple-step income statement for Huff.
2. Prepare a 2016 retained earnings statement.
3. Compute the 2016 return on common equity (Net Income / Average Shareholders’ Equity).

  • CreatedOctober 05, 2015
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