Question 4- (12 Marks) Presented below is information which relates to Labrador Limited for 2017: Collections of credit sales. Retained earnings, January 1, 2017. Sales Selling and administrative expenses.. Casualty loss (pre-tax). Cash dividends declared on common stock. Cost of goods sold Loss resulting from calculation error on depreciation charge in 2015 (pre-tax) Other revenues. Other expenses. Loss from early extinguishment of debt (pre-tax). Gain from transactions in foreign currencies (pre-tax). Proceeds from sale of Strathroy common shares. Additional information: 1. Early in 2017, Labrador changed depreciation methods for its plant assets from the double declining-balance to the straight-line method. The affected assets were purchased at the beginning of 2015 for $200,000, had no residual value, and had useful lives of 10 years. Depreciation expense of $20,000 is included in the "Selling and Administrative Expenses" of $290,000 2. On September 1, 2017 Labrador sold one of its segments (product line) to Best Industries for a gain (pre-tax) of $550,000. During the period January 1 to August 31, the discontinued segment incurred an operating loss (pre-tax) of $480,000. This loss is not included in any of the numbers shown above. 3. Included in "Selling and Administrative Expenses" is "Bad Debts Expense" of $19,000. Labrador bases its bad debts expense upon a percentage of sales. In 2015 and 2016, the percentage was 0.5 %. In 2017, the percentage was changed to 1%. s Protected View t Instructions In good form, prepare a multiple-step income statement for 2017 Assume a 20% income tax rate and that 20,000 common shares were outstanding during the year. da $1,100,000 800,000 1,900,000 290,000 350,000 34,000 a 1,100,000 460,000 180,000 120,000 340,000 220,000 60,000 e B 3 estion 4- (12 Marks) unted below is information which relates to Labrador Limited for 2017: Collections of credit sales. Retained earnings, January 1, 2017. Sales.. Selling and administrative expenses. Casualty loss (pre-tax). Cash dividends declared on common stock. Cost of goods sold Loss resulting from calculation error on depreciation charge in 2015 (pre-tax) Other revenues Other expenses. Loss from early extinguishment of debt (pre-tax).. Gain from transactions in foreign currencies (pre-tax) Proceeds from sale of Strathroy common shares. $1,100,000 800,000 1,900,000 290,000 350,000 34,000 1,100,000 460,000 180,000 120,000 340,000 220,000 60,000 dditional information: Early in 2017, Labrador changed depreciation methods for its plant assets from the double declining-balance to the straight-line method. The affected assets were purchased at the beginning of 2015 for $200,000, had no residual value, and had useful lives of 10 years Depreciation expense of $20,000 is included in the "Selling and Administrative Expenses" of $290,000. On September 1, 2017, Labrador sold one of its segments (product line) to Best Industries for a gain (pre-tax) of $550,000. During the period January 1 to August 31, the discontinued segment incurred an operating loss (pre-tax) of $480,000. This loss is not included in any of the numbers shown above. a 3. Included in "Selling and Administrative Expenses" is "Bad Debts Expense" of $19,000. Labrador bases its bad debts expense upon a percentage of sales. In 2015 and 2016, the percentage was 0.5 %. In 2017, the percentage was changed to 1%. Instructions In good form, prepare a multiple-step income statement for 2017. Assume a 20% income tax rate and that 20,000 common shares were outstanding during the year.