At the beginning of 2013, Cameron Company's retained earnings was $211,200. For 2013, Cameron has calculated its pretax income from continuing operations to be $78,800. During 2013, the following events also occurred:
1. During July, Cameron sold Division M (a component of the company). It has determined that the pretax income from the operations of Division M during 2013 totals $49,100 and that a pretax loss of $49,500 was incurred on the sale of Division M.
2. Cameron had 14,000 shares of common stock outstanding during all of 2013. It declared and paid a $2 per share cash dividend on this stock.
3. Cameron experienced an extraordinary event. It recognized a material pretax gain of $26,900 on the event.
Required:
Assuming that all the "pretax" items are subject to a 30% income tax rate:
1. Complete the lower portion of Cameron Company's 2013 income statement, beginning with "Pretax Income from Continuing Operations." Round earnings per share computations to two decimal places.
CAMERON COMPANY
Partial Income Statement
For Year Ended December 31, 2013
Pretax income from continuing operations
Results from discontinued operations
Components of Income
EPS
2. Prepare an accompanying statement of retained earnings for the year ended December 31, 2013.
The Huff Company presents the following partial list of account balances taken from its December 31, 2013 adjusted trial balance:
Sales (net) $99,380 Operating expenses $30,800
Interest expense 3,200 Common stock, $5 par 11,000
Cost of goods sold 58,400 Retained earnings, 1/1/2013 42,900
The following information is also available for 2013 and is not reflected in the preceding accounts:
1. The common stock has been outstanding all year. A cash dividend of $1.1 per share was declared and paid.
2. Land was sold at a pretax gain of $6,700.
3. Division X (a component of the company) was sold at a pretax gain of $6,400. It had incurred a $7,100 pretax operating loss during 2013.
4. A tornado, which is an unusual and infrequent event in the area, caused a $5,500 pretax loss.
5. The income tax rate on all items of income is 30%.
6. The average stockholders' equity is $34,000.
Required:
1. Prepare a multiple-step income statement for Huff Company for the year ended December 31, 2013. Round earnings per share computations to two decimal places.
Huff COMPANY
Income Statement (Multi-Step)
For Year Ended December 31, 2013
Results from discontinued operations
Components of Income EPS
2. Prepare a statement of retained earnings for the year ended December 31, 2013.