P14-5B
Prepare income statement and comprehensive income statement.
(LO 3) AP
The ledger of Coquitlam Corporation at December 31, 2017, contains the following summary data:
Cash dividends—common $ 125,000 Other comprehensive income—gain on equity investments (before income tax) $ 47,000
Cash dividends—preferred 55,000
Cost of goods sold 888,000 Other expenses 18,000
Sales 1,750,000 Retained earnings, January 1, 2017 642,000
Operating expenses 451,000
Your analysis reveals the following additional information:
• 1.The company has a 25% income tax rate.
• 2.The ceramics division was discontinued on July 31. The loss from operations for the division up to that day was $150,000 before income tax. The division was sold at a pre-tax gain of $70,000 before income tax.
• 3.There were 200,000 common and 100,000 noncumulative preferred shares issued on December 31, 2016, with no changes during the year.
Instructions
(a)
Prepare a multiple-step income statement for the year.
(b)
Prepare a statement of comprehensive income as a separate statement.
WileyPLUS Problem 14-3
Grant Construction Ltd. prepares its reports using IFRS. The following information relates to its shareholders’ equity on January 1, 2017, the first day of its fiscal year.
$0.50-noncumulative preferred shares, unlimited number of shares authorized, 100,000 shares issued 1,200,000
Common shares, unlimited number of shares authorized, 1,200,000 shares issued 3,672,200
Contributed surplus—reacquisition of common shares 16,000
Retained earnings 7,100,000
Accumulated other comprehensive income (434,000)
During the year, there were the following transactions related to shares.
1. On May 15, 2017, Grant purchased a Caterpillar bulldozer in exchange for 90,000 common shares with a market value of $3.15 per share. The fair value of the bulldozer was $295,400.
2. On June 1, 2017, Grant’s board of directors declared the semi-annual dividend to the preferred shareholders to shareholders of record on June 15, payable June 30.
3. The semi-annual dividend to the preferred shareholders is paid on the appropriate date.
4. On September 16, 2017, reacquired 45,000 common shares for $155,000 cash.
5. On December 15, 2017, Grant’s board of directors declared the second semi-annual dividend to the preferred shareholders payable December 30, 2017 and a 10% stock dividend to the common shareholders for shareholders of record on December 16, 2017 payable January 20, 2018. The market price of the common shares at December 15, 2017 was $4.00 per share.
6. Reported profit of $1,450,000 for the year.
Prepare a schedule showing all transactions for common shares and the calculation of the average per share amount of shares issued. (Round the average cost per share to three decimal places, e.g. 5.271 and final answers to 0 decimal places, e.g. 5,271.)
Date Transaction # Shares Proceeds Average
Cost
Jan. 1 Beginning balance $
$
May. 15 Issued shares
Sub-total $
Sep. 16 Reacquisition
$
Dec. 15 Stock dividend
Balance Dec. 31 $
$
Journalize each of the transactions. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select “No Entry” for the account titles and enter 0 for the amounts. Record journal entries in the order presented in the problem.)
Prepare the statement of changes in shareholders’ equity for the year ended December 31, 2017. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)
