Presented below is financial information of the Mickey Corporation for 2008
Beginning Retained Earnings, 1/1/08 $950,000
Gain on the Sale of Investments (normal recurring) $110,000
Sales for the Year $30,000,000
Loss Due to Flood Damage (unusual & infrequent) $125,000*
Cost of Goods Sold $21,000,000
Loss on Disposal of Retail Division $450,000
Interest Revenue $70,000
Loss on Operations of Retail Division $460,000
Selling and Administrative Expenses 5,500,000
Dividends Declared on Common Stock $230,000
Write-Off of Goodwill $520,000
Dividends Declared on Preferred Stock $80,000
Federal Income Tax on Operations for 2008 1,600,000
*net of tax
Mickey Corporation decided to discontinue its retail operations and to retain its manufacturing operations. On August 15, Mickey sold the retail operations to Schoen Company. During 2008, there were 250,000 shares of common stock outstanding all year.
Directions: Prepare a multiple-step income statement for the year 2008 on a separate Excel spreadsheet as directed in the Problem Set 1 directions.
The expert examines multi-step income statements for federal income tax.