Prepare Mantego income statement

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Problem - Income Statement and Basic EPS Mantego Company listed the following selected pretax items as of December 31, 2019:

 

Debit

Credit

Preferred stock, 8%, $100 par, nonconvertible


$ 60,000

Common stock, $5 par


90,000

Sales


206,000

Cost of goods sold

$131,000


Gain on disposal of discontinued Division B


8,000

Operating expenses

19,250


Loss from operations of discontinued Division B

20,000


Additional information:

The preferred shares had been outstanding the entire year; annual dividends were declared and paid in 2019. During 2019, 2,000 common shares were issued on July 2, and 6,000 common shares were issued on November 3. Common dividends of $12,500 were declared and paid in 2019. The company is subject to a 30% income tax rate.

Required - Prepare Mantego's 2019 income statement (multiple-step) and the related note.

Reference no: EM132889855

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