Huff Company presents the following items derived from its December 31, 2019, adjusted trial balance:
Sales (net) $124,000 Operating expenses $30,400
Interest expense 3,700 Common stock, $5 par 22,000
Cost of goods sold 66,200 Retained earnings, 1/1/201 945,800
The following information is also available for 2019 and is not reflected in the preceding accounts:The common stock has been outstanding all year. A cash dividend of $1.28 per share was declared and paid.
Land was sold at a pretax gain of $6,300
Division X (a major component of the company) was sold at a pretax gain of $4,700.
It had incurred a $9,500 pretax operating loss during 2019.
A tornado, which is an unusual event in the area, caused a $5,400 pretax loss.
The income tax rate on all items of income is 30%.
The average shareholders’ equity is $90,000.
a. Prepare a 2016 multiple-step income statement for Huff.
b. Prepare a 2016 retained earnings statement.
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