Selected information about income statement accounts for the Reed Company is presented below the company's fiscal year ends on
December :
On July the company adopted a plan to discontinue a division that qualifies as a component of an entity as defined by GAAP.
The assets of the component were sold on September for $ less than their book value. Results of operations for the
component included in the above account balances were as follows:
In addition to the account balances above, several events occurred during that have not yet been reflected in the above
accounts:
A fire caused $ in uninsured damages to the main office building. The fire was considered to be an unusual event.
Inventory that had cost $ had become obsolete because a competitor introduced a better product. The inventory was
written down to its scrap value of $
Income taxes have not yet been recorded.
Required:
Prepare a multiplestep income statement for the Reed Company for showing information in comparative format, including
income taxes computed at and EPS disclosures assuming shares of outstanding common stock.
Note: Round EPS answers to decimal places.
