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Income Statement, Lower Portion At the beginning of 2019, Cameron Company’s retained earnings was $212,000. For 2019, Cameron has calculated its pretax income from continuing operations to be $120,000. During 2019, the following events also occurred: 1. During July, Cameron sold Division M (a component of the company). It has determined that the pretax income from the operations of Division M during 2019 totals $39,000 and that a pretax loss of $40,500 was incurred on the sale of Division M. 2. Cameron had 21,000 shares of common stock outstanding during all of 2019. It declared and paid a $1 per share cash dividend on this stock. Required: Assuming that all the pretax items are subject to a 30% income tax rate: 1. Complete the lower portion of Cameron’s 2019 income statement, beginning with “Pretax Income from Continuing Operations.” 2. Prepare an accompanying retained earnings statement.

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Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
Publisher: Cengage Learning
ISBN: 9781337788281
BuyFind

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
Publisher: Cengage Learning
ISBN: 9781337788281

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Chapter
Section
Chapter 5, Problem 2P
Textbook Problem

Income Statement, Lower Portion At the beginning of 2019, Cameron Company’s retained earnings was $212,000. For 2019, Cameron has calculated its pretax income from continuing operations to be $120,000. During 2019, the following events also occurred:

  1. 1. During July, Cameron sold Division M (a component of the company). It has determined that the pretax income from the operations of Division M during 2019 totals $39,000 and that a pretax loss of $40,500 was incurred on the sale of Division M.
  2. 2. Cameron had 21,000 shares of common stock outstanding during all of 2019. It declared and paid a $1 per share cash dividend on this stock.

Required:

Assuming that all the pretax items are subject to a 30% income tax rate:

  1. 1. Complete the lower portion of Cameron’s 2019 income statement, beginning with “Pretax Income from Continuing Operations.”
  2. 2. Prepare an accompanying retained earnings statement.

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Chapter 5 Solutions

Intermediate Accounting: Reporting And Analysis
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