he following information was taken from the records of Roland Carlson Inc. for the year 2007. Income tax applicable to income from continuingoperations $187,000; income tax applicable to loss on discontinued operations $25,500; income tax applicable to extraordinary gain $32,300; income tax applicable to extraordinary loss$20,400; and unrealized holding gain on available-for-sale securities $15,000

1. Extraordinary gain $ 95,000 
2. Cash dividends declared $ 150,000
3. Loss on discontinued operations75,000
4. Retained earnings January 1, 2007, 600,000
5. Administrative expenses 240,000
6. Cost of goods sold850,000Rent revenue 40,000
7. Selling expenses 300,000 
8. Extraordinary loss 60,000
9. Sales 1,900,000 Shares 
10. outstanding during 2007 were 100,000.

Instructions

(a) Prepare a single-step income statement for 2007.

(b) Prepare a retained earnings statement for 2007.

(c) Show how comprehensive income is reported using the second income statement format.

(c) Single-step:

1. Simplicity and conciseness.

2. Probably better understood by users.

3. Emphasis on total costs and expenses and net income.

4. Does not imply priority of one revenue or expense over another.

Multiple-step:

1. Provides more information through the segregation of operating and nonoperating items.

2. Expenses are matched with related revenue.E4-16 (Various Reporting Formats) T

Answer rating: 100% (QA)

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