(Solved): Preparing an Income Statement and a Statement of Comprehensive Income The following pretax amounts ...

Preparing an Income Statement and a Statement of Comprehensive Income The following pretax amounts are taken from the adjusted trial balance of Avoca Auto Corp. at December 31, 2020, its annual year-end. Sales revenue $390,000 165,000 Cost of goods sold Operating expenses 120,000 Gain on debt retirement 30,000 Interest expense 12,000 Loss from discontinued operations 75,000 Retained earnings balance, December 31, 2019 45,000 Dividends declared and paid 37,500 Unrealized holding gain on debt investment securities, net of tax 6,000 15,000 shares Common stock, weighted average shares outstanding Required a. Prepare a single-step income statement. Assume an average 25% tax rate on all items. Include earnings per share disclosures. b. Prepare a comprehensive income statement by showing a separate but consecutive statement of comprehensive income. Ignore earnings per s disclosures b. Prepare a comprehensive income statement by showing a separate but consecutive statement of comprehensive income. Ignore earnings per sh disclosures. c. Compute the ending retained earnings balance at December 31, 2020. • Enter revenues and gains and expenses and losses in the order of the largest dollar amount to the smallest dollar amount. • Do not use negative signs with any of your answers. • Enter the answers for per share amounts in dollars and cents, rounded to the nearest penny. Single-step Income Statement Statement of Comprehensive Income Retained Earnings Balance a. Prepare a single-step income statement. Assume an average 25% tax rate on all items. Include earnings per share disclosures. Avoca Auto Corp. Income Statement For the Year Ended December 31, 2020 Revenues and gains Sales revenue ? 390,000 ? 30,000 ? Gain on debt retirement 420,000 ? Total revenues and gains ? $ Sales revenue Gain on debt retirement Total revenues and gains Cost of goods sold Operating expenses Interest expense Total expenses and losses Income before income taxes Income tax expense Income from continuing operations Discontinued operations Loss from discontinued component, net of tax savings Net income Per share: Income from continuing operations Loss from discontinued component, net of tax savings Net income Expenses and losses ? ? ? ? ? ? ? ? $ $ ? ? $ ? ? ? $ 390,000? 30,000 420,000 ? 165,000 120,000 12,000 297,000 ? 123,000 ? 30,750 92,250 ? 56,250 36,000? 0 x 0 x 0 x