Income Statement and Retained Earnings
The Huff Company presents the following partial list of accountbalances taken from its December 31, 2016 adjusted trialbalance:
| Sales (net) | $124,000 | | | Operating expenses | $20,000 |
| Interest expense | 3,100 | | | Common stock, $5 par | 16,500 |
| Cost of goods sold | 56,000 | | | Retained earnings, 1/1/2016 | 44,500 |
The following information is also available for 2016 and is notreflected in the preceding accounts:
The common stock has been outstanding all year. A cash dividendof $1.46 per share was declared and paid.
Land was sold at a pretax gain of $7,100.
Division X (a major component of the company) was sold at apretax gain of $4,600. It had incurred a $9,430 pretax operatingloss during 2016.
A tornado, which is an unusual event in the area, caused a$5,380 pretax loss.
The income tax rate on all items of income is 30%.
The average shareholders' equity is $90,000.
Required:
1. Prepare a 2016 multiple-step income statement for Huff. Roundearnings per share computations to two decimal places.
| HUFF COMPANY |
| Income Statement (Multi-Step) |
| For Year Ended December 31, 2016 |
| | $ |
| | |
| | $ |
| | |
| | $ |
| Other items | | |
| $ | |
| | |
| | |
| | $ |
| | |
| | $ |
| Results from discontinued operations | | |
| $ | |
| | |
| | $ |
| Components of Income | | EPS |
| | $ |
| | |
| | $ |
2. Prepare a 2016 retained earnings statement.
| HUFF COMPANY |
| Statement of Retained Earnings |
| For Year Ended December 31, 2016 |
| $ |
| |
| $ |
| |
| $ |
3. Compute the 2016 return on common equity. Round to onedecimal place.
%
