Prepare a Corporate Income Statement in Good Form from the Following

question 148

Essay

Prepare a corporate income statement in good form from the following year-end balances as of December 31,20xx,from the general ledger of Hammond Corporation.Assume 10,000 shares of common stock are outstanding for the year.
$\begin{array}{llr} \text { Administrative Expenses} &\$24,000\\ \text { Cost of Goods Sold } &120,000\\ \text { Discontinued Operations } &\\ \text { (1) Income from the Operations of Discontinued Segment (net of taxes, \( \$ 10,000 \) )} &30,000\\ \text { (2) Loss on Disposal of Segment (net of taxes savings, \( \$ 5.000 \) ) } &15,000\\\text { Extraordinary Loss from Fire (net of tax savings, } \$ 1,250 \text { ) } & 5,000 \\\text { Income Taxes Applicable to Continuing Operations } & 12,000 \\\text { Sales } & 240,000 \\\text { Selling Expenses } & 72,000\end{array}$

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Definitions:

Acquisition

The process by which a company buys most or all of the target company's ownership stakes to assume control.

Stockholders

Stockholders, or shareholders, are individuals or entities that own one or more shares of stock in a public or private corporation, granting them equity ownership.

Acquiring Firms

Companies that purchase a majority stake in another company to assume control of its operations and resources.

Acquisition

The process by which one company takes over another and becomes the new owner.