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presented below is information related to Begley Corp. for the year 2020.

Net sales $2,200,000 Write-off of inventory due to obsolescence $ 80,000

Cost of goods sold 980,000 Depreciation exp. omitted by accident in 2019 40,000

Selling expenses 165,000 Casualty loss (extraordinary item) before taxes 70,000

Admin. expenses 148,000 Dividends declared 45,000

Dividend revenue 40,000 Retained earnings at December 31, 2019 980,000

Interest revenue 14,000 Effective tax rate of 34% on all items

Instructions

(a) Prepare a multiple-step income statement for 2020. Assume that 60,000 shares of common stock are outstanding

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BEGLEY CORP.
Income Statement
For the Year Ended December, 31, 2020
	$	$
Revenue
Net Sales		2,200,000.00
Cost of goods sold		980000
Gross Profit		1,220,000.00
Operating Expenses
Selling Expense	165000
Administrative Expense	148000
Total operating expenses		313000
Income from Operations		907,000.00
Other Revenues and Gains
Dividend revenue	40000
Interest revenue	14000	54000
		853,000.00
Other expenses and losses
Write-off of inventory due to obsolescence		80000
Income before taxes and extraordinary item		773,000.00
Income taxes (34%)		262820
Income before extraordinary item		510,180.00
Extraordinary item:
Casualty loss	70000
Less: Applicable tax reduction (34%)	23800	46200
Net Income		463,980.00

Earnings per Common Share		7.73
($463,980 / 60,000 shares)

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