E4-6B (Multiple-step and Extraordinary Items)

E4-6B (Multiple-step and Extraordinary Items) The following balances were taken from the books of
Schimank Corp. on December 31, 2014.
Interest revenue $ 120,400 Accumulated depreciation—equipment $ 56,000
Cash 71,400 Accumulated depreciation—building 39,200
Sales 1,932,000 Notes receivable 217,000
Accounts receivable 210,000 Selling expenses 271,600
Prepaid insurance 28,000 Accounts payable 238,000
Sales returns and allowances 210,000 Bonds payable 140,000
Allowance for doubtful Administrative and general
accounts 9,800 expenses 135,800
Sales discounts 63,000 Accrued liabilities 44,800
Land 140,000 Interest expense 84,000
Equipment 280,000 Notes payable 140,000
Building 196,000 Loss from earthquake damage
Cost of goods sold 869,400 (extraordinary item) 210,000
Common stock 700,000
Retained earnings 29,400
Assume the total effective tax rate on all items is 34%.
Instructions
Prepare a multiple-step income statement; 100,000 shares of common stock were outstanding during
the year.