The ledger of Coquitlam Corporation at December 31, 2014, contains the following summary data:
Cash dividends-common.................................$ 125,000
Cash dividends-preferred....................................55,000
Cost of goods sold.............................................888,000
Net sales......................................................1,750,000
Operating expenses............................................451,000
Other comprehensive gain (before income tax).............47,000
Other expenses...................................................18,000
Retained earnings, January 1, 2014.........................642,000
Your analysis reveals the following additional information:
1. The company has a 25% income tax rate.
2. The ceramics division was discontinued on July 31. The loss from operations for the division up to that day was $150,000 before income tax. The division was sold at a pre-tax gain of $70,000 before income tax.
3. There were 200,000 common and 100,000 preferred shares issued on December 31, 2013, with no changes during the year.
Instructions
(a) Prepare a multiple-step income statement for the year including EPS.
(b) Prepare a statement of comprehensive income as a separate statement.
Taking It Further
Why are gains and losses from discontinued operations reported separately from continuing operations?