Reference no: EM133075798
Question - Presented below is information related to Andy's Employee Misfits Agency, Inc. Retained earnings, January 1, 2021 $650,000
Sales 1,600,000
Selling and administrative expenses 240,000
Hurricane loss (before tax) on plant 250,000
Cash dividends declared and paid on common stock 33,600
Cost of goods sold 960,000
Gain resulting from computation error on depreciation charge in 2019 (before tax) 520,000 (error was not discovered until 2021)
Dividend income 60,000
Loss on sale of building 50,000
Required -
a) Prepare (in good form) a multiple-step income statement (with EPS) and a statement of retained earnings for Andy's for the year ended December 31, 2021. Assume a 30% tax rate and that 100,000 shares of common stock were outstanding during the year.
b) How does the multi-step income statement format approach lend itself to effective analysis of a company's performance?