Textbook Problem

Comprehensive: Income Statement and Supporting Schedules The following s a partial list of the account balances, after adjustments, of Silvoso Company on December 31, 2019:

The following information is also available:

1. 1. The company declared and paid a $0.60 per share cash dividend on its common stock. The stock was outstanding the entire year.
2. 2. A physical count determined that the December 31, 2019, ending inventory is $34,100.
3. 3. A tornado destroyed a warehouse, resulting in a pretax loss of $12,000. The last tornado in this area had occurred 10 years earlier.
4. 4. On May 1, 2019, the company sold an unprofitable division (R). From January through April, Division R (a major component of the company) had incurred a pretax operating loss of $8,700. Division R was sold at a pretax gain of $10,000.
5. 5. The company is subject to a 30% income tax rate. Its income tax expense for 2019 totals $4,230. The breakdown is as follows:

1. 6. The company had average shareholders’ equity of $150,000 during 2019.

Required:

1. 1. As supporting documents for Requirement 2, prepare separate supporting schedules for cost of goods sold, selling expenses, general and administrative expenses, and depreciation expense.
2. 2. Prepare a 2019 multiple-step income statement for Silvoso. Include any related note to the financial statements.
3. 3. Prepare a 2019 retained earnings statement.
4. 4. Next Level What was Silvoso’s return on common equity for 2019? What is your evaluation of Silvoso’s return on common equity if last year it was 10%?