DEVRY ACCT 550 Week 2 Homewo .pdf
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DEVRY ACCT 550 Week 2 Homework
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ACCT 550 Week 2 Homework Assignment
E4-4 (Multiple-Step and Single-Step) Two accountants for the firm of Allen and
Wright are arguing about the merits of presenting an income statement in a
multiple-step versus a single-step format. The discussion involves the following
2012 information related to Webster Company ($000 omitted).
Depreciation of office furniture and equipment
Cost of goods sold
Depreciation of sales equipment
Income tax expense
(a) Prepare an income statement for the year 2012 using the multiple-step form.
Common shares outstanding for 2012 total 40,550 (000 omitted).
(b) Prepare an income statement for the year 2012 using the single-step form.
(c) Which one do you prefer? Discuss.
E4-12 (Earnings per Share) At December 31, 2011, Schroeder Corporation had the
following stock outstanding.
8% cumulative preferred stock, $100 par, 107,500 shares
Common stock, $5 par, 4,000,000 shares
During 2012, Schroeder did not issue any additional common stock. The following
also occurred during 2012.
Income from continuing operations before taxes
Discontinued operations (loss before taxes)
Preferred dividends declared
Common dividends declared
Effective tax rate
Compute earnings per share data as it should appear in the 2012 income statement
of Schroeder Corporation. (Round to two decimal places.)
P4-1 (Multiple-Step Income, Retained Earnings) Presented below is information
related to Dickinson Company for 2012.
Retained earnings balance, January 1, 2012
Cost of goods sold
Selling and administrative expenses
Write-off of goodwill
Income taxes for 2012
Gain on the sale of investments (normal recurring)
Loss due to flood damage—extraordinary item (net of tax)
Loss on the disposition of the wholesale division (net of tax)
Loss on operations of the wholesale division (net of tax)
Dividends declared on common stock
Dividends declared on preferred stock
Prepare a multiple-step income statement and a retained earnings statement.
Dickinson Company decided to discontinue its entire wholesale operations and to
retain its manufacturing operations. On September 15, Dickinson sold the wholesale
operations to Rogers Company. During 2012, there were 500,000 shares of common
stock outstanding all year.