The following data were taken from the records of Skate

The following data were taken from the records of Skate N’ Ski Corporation for the year
endedOctober 31, 2006:Income statement data:Administrative expenses .........................$
100,000Cost of merchandise sold ..........................732,000Gain on condemnation of land
..........................60,000Income tax:Applicable to continuing operations
......................206,000Applicable to loss from discontinued operations
...................28,800Applicable to gain on condemnation of land ...................24,000Interest
expense ................................8,000Interest revenue ................................5,000Loss from
discontinued operations ......................76,800Loss from fixed asset impairment
......................200,000Restructuring charge . ...........................90,000Sales
..................................2,020,000Selling expenses ...............................400,000Retained earnings
and balance sheet data:Accounts payable ............................$ 89,500Accounts receivable
............................309,050Accumulated depreciation ........................3,050,000Accumulated
other comprehensive loss .....................24,000Allowance for doubtful accounts
.........................21,500Cash ...................................145,500Common stock, $15 par (400,000
shares authorized; 152,000 shares issued) ......2,280,000Deferred income taxes payable
(current portion, $4,700) ...............25,700Dividends:Cash dividends for common stock
.......................40,000Cash dividends for preferred stock .......................100,000Stock dividends
for common stock ......................60,000Dividends payable ..............................30,000Employee
termination benefit obligation (current) ................60,000Equipment
...............................9,541,050Income tax payable ............................55,900Interest receivable
.............................2,500Merchandise inventory (October 31, 2006), at lower of cost (FIFO) or
market .....425,000Notes receivable ..............................77,500Paid-in capital from sale of
Treasury stock ...................16,000Paid-in capital in excess of par—common stock
.................894,750Paid-in capital in excess of par—preferred stock .................240,000Patents
.................................$ 55,000Preferred 6 2/3% stock, $100 par (30,000 shares authorized;
15,000 shares issued) ..1,500,000Prepaid expenses ..............................15,900Retained
earnings, November 1, 2005 ......................2,446,150Temporary investment in marketable
equity securities ...............145,000Treasury stock (2,000 shares of common stock at cost of $35
per share) ..........70,000Unrealized loss (net of tax) on temporary equity securities
.............24,000Instructions1. Prepare a multiple-step income statement for the year ended
October 31, 2006, concluding with earnings per share. In computing earnings per share,
assume that the average number of common shares outstanding was 150,000 and preferred
dividends were $100,000. Assume that the gain on condemnation of land is an extraordinary
item. 2. Prepare a retained earnings statement for the year ended October 31, 2006.3. Prepare
a balance sheet in report form as of October 31, 2006.View Solution:
The following data were taken from the records of Skate
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