Question :

Corpus Christi Corporation reported the subsequent pretax (and taxable) information for 2010:

Income from continuing operations        $400,000

Loss on disposal of Segment B   40,000

Extraordinary flood loss 60,000

Prior period adjustment Depreciation was understated in 2009  12,000

Gain from operations of discontinued Segment B             20,000

Income tax rate                30%

Required:           

a. Organize the lower portion of Corpus Christi's 2010 income statement, starting with pretax income for continuing operations.

b. Create Corpus Christi's 2010 statement of retained earnings, consider that retained earnings at January 1, 2010, was $600,000 and the company paid $35,000 of dividends in 2010.