Multiple Step Income Statement for the Smith Company

Presented below is information related to Smith Company.

Retained earnings, December 31, 2005 $ 650,000

Sales 1,800,000

Selling and administrative expenses 240,000

Hurricane loss (pre-tax) on plant (extraordinary item) 250,000

Cash dividends declared on common stock 33,600

Cost of goods sold 960,000

Gain resulting from computation error 520,000
on depreciation charge in 2004(pre-tax)

Other revenue 70,000

Other expenses 50,000

Instructions

Prepare in good form a multiple-step income statement for the year 2006. Assume a 30% tax rate and that 200,000 shares of common stock were outstanding during the year.

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...y item) 250,000

Cash dividends declared on common stock 33,600

Cost of goods sold 960,000

Gain resulting from computation error 520,000
on depreciation charge in ...