(Multiple-step and Extraordinary Items) The following balances were taken from the books of Maria Conchita Alonzo Corp....

Question:

(Multiple-step and Extraordinary Items) The following balances were taken from the books of Maria Conchita Alonzo Corp. on December 31, 2004.

Interest revenue $ 86,000 Accumulated depreciation—equipment $ 40,000

Cash 51,000 Accumulated depreciation—building 28,000

Sales 1,380,000 Notes receivable 155,000

Accounts receivable 150,000 Selling expenses 194,000

Prepaid insurance 20,000 Accounts payable 170,000

Sales returns and allowances 150,000 Bonds payable 100,000

Allowance for doubtful Administrative and general

accounts 7,000 expenses 97,000

Sales discounts 45,000 Accrued liabilities 32,000

Land 100,000 Interest expense 60,000

Equipment 200,000 Notes payable 100,000

Building 140,000 Loss from earthquake damage

Cost of goods sold 621,000 (extraordinary item) 150,000

Common stock 500,000

Retained earnings 21,000

Assume the total effective tax rate on all items is 34%.

Instructions

Prepare a multiple-step income statement; 100,000 shares of common stock were outstanding during the year.

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