Plush Textiles Inc. shows a retained earnings balance on January 1, 2013, of $580,000. For 2013, the

Question:

Plush Textiles Inc. shows a retained earnings balance on January 1, 2013, of $580,000.
For 2013, the income from continuing operations was $240,000 before income tax.
Following is a list of special items:
Income from operations of a discontinued textiles division . . . . . . . . . . . . . . . . . . . . . $22,000
Loss on the sale of the textiles division . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60,000
Extraordinary gain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31,000
Correction of sales understatement in 2012 (net of income taxes of $17,500 to be paid when amended 2012 return is filed) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32,500
Omission of depreciation charges of prior years (a claim has been filed for an income tax refund of $6,400) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,000
Income taxes paid during 2013 were $87,200, which consisted of the tax on continuing operations, plus $8,800 resulting from operations of the discontinued textiles division and $12,400 from the extraordinary gain, less a $24,000 tax reduction for the loss on the sale of the textiles division. Dividends of $45,000 were declared by the company during the year (30,000 shares of common stock are outstanding).
Instructions:
Prepare the income statement for Plush Textiles Inc. beginning with Income from continuing operations before income taxes. Include an accompanying retained earnings statement?
Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on...
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Intermediate Accounting

ISBN: 978-0538479738

18th edition

Authors: Earl K. Stice, James D. Stice

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