Question 4 - (12 Marks) rented 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 dedared 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 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 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 19 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. Question 4 - (12 Marks) rented 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 dedared 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 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 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 19 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