Preparing a Multiple$-$ Step Income Statement with Earnings Per Share Disclosure

The following amounts are taken from the accounting records of Trans Corp. at December $31,$ its annual year$-$end.

Sales revenue $$68,000$

Service revenue $12,800$

Cost of goods sold $34,000$

Selling and administrative expenses $17,200$

Investment revenue $1,200$

Interest expense $800$

Infrequent item: loss on sale of long$$term investment $2,000$

Loss due to fire damage $2,800$

Cash dividends declared and paid $1,600$

Prior period adjustment, correction of error from prior period, pretax $($a debit$)2,400$

Balance, retained earnings, December $31,$ prior year $16,060$

Common stock $($par $$5)$ outstanding $6,000$ shares

Average income tax rate on all items $25\%$

Required

a$.$ Prepare a multiple$-$step income statement, including tax allocation and earnings per share disclosure. Assume that service revenue is nonoperating.

$$ Note: Use a negative sign only with any expenses or losses in the Other revenues and $($expenses$)$ section.

Trans Corporation

Income Statement

For Year Ended December $31$

Answer

Answer

Answer

Operating expense

Answer

Answer

Other revenues and $($expenses$)$

Answer

Answer

Answer

Answer

Answer

Answer

Answer

Answer

Earnings per share $Answer

b$.$ Compute the ending balance at December $31$ for retained earnings by completing the following reconciliation.

$$ Note: Do not use negative signs with any of your answers.