Shown below is an income statement for 2010 that was prepared by a poorly trained bookkeeper of

Question:

Shown below is an income statement for 2010 that was prepared by a poorly trained bookkeeper of Howell Corporation.

Howell Corporation

INCOME STATEMENT

31-Dec-10

Sales revenue ..................... $945,000.00

Investment revenue ................... $19,500.00

Cost of merchandise sold .................$(408,500.00)

Selling expenses ....................$(145,000.00)

Administrative expense .................$(215,000.00)

Interest expense ..................... $(13,000.00)

Income before special items ................ $183,000.00

Special items

Loss on disposal of a component of the business ..... $(30,000.00)

Major casualty loss (extraordinary item) ........... $(70,000.00)

Net federal income tax liability ............... $(24,900.00)

Net income ........................ $58,100.00

Instructions

Prepare a multiple-step income statement for 2010 for Howell Corporation that is presented in accordance with generally accepted accounting principles (including format and terminology). Howell Corporation has 65,000 shares of common stock authorized and issued there are 15,000 shares of treasury stock and has a 30% federal income tax rate on all tax related items. Round all earnings per share figures to the nearest cent.

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... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...