Reference no: EM132622237
Question - Presented below is information which relates to Celina Limited for 2019:
Retained earnings, January 1, 2019 800,000
Sales 1,900,000
Selling and administrative expenses 290,000
Cash dividends declared on common stock 34,000
Cost of goods sold 1,100,000
Other revenues 180,000
Other expenses 120,000
Proceeds from sale of Celina common shares 60,000
Accounts Receivable balance, December 31, 2019 $1,100,000
Additional information:
1. The Selling and Administrative Expenses figure above does not include depreciation. Celina has not yet recorded depreciation for 2019. Celina depreciates its plant assets using the straight-line method. These assets were purchased at the beginning of 2014 for $173,000, have no residual value, and had useful lives of 10 years.
2. On September 1, 2019, Celina sold one of its business segments to Quasi Industries for a gain (pre-tax) of $475,000. During the period January 1 to August 31, the discontinued segment incurred an operating loss (pre-tax) of $320,000. This loss is not included in any of the numbers shown above.
3. Selling and Administrative Expenses also do not include Bad Debts Expense, as Celina has not recorded an estimate for 2019. Celina bases its bad debts expense upon a percentage of Sales, set for the past several years at 1.5%.
Instructions - In good form, make the multiple-step income statement for 2019. Assume a 15% income tax rate and that the weighted average number of common shares outstanding during the year was 60,000.