2. At the beginning of 2024, Cameron Company's retained earnings was $212,000. For 2024, Cameron has calculated its pretax income from continuing operations to be $120,000. During 2024, the following events also occurred: 1. During July, Cameron sold Division M (a component of the company). The book values of Division M's assets and liabilities are $300,000 and $100,000, respectively, at the time of sale. The company sold Division M for cash $159,500. During 2024 before its sale, Division M recognized revenues of 100,000 and expenses of 61,000 (excluding income tax expense). 2. Cameron had 21,000 shares of common stock outstanding during all of 2024. It declared and paid a $1 per share cash dividend on this stock. 3. Cameron also paid $7,500 cash dividend to its preferred stockholders. Required: Assuming that all the "pretax" items are subject to a 21% income tax rate: 1. Complete the lower portion of Cameron's 2024 income statement, beginning with "Pretax Income from Continuing Operations." 2. Prepare an accompanying retained earnings statement.
2. At the beginning of 2024, Cameron Company's retained earnings was $212,000. For 2024, Cameron has calculated its pretax income from continuing operations to be $120,000. During 2024, the following events also occurred: 1. During July, Cameron sold Division M (a component of the company). The book values of Division M's assets and liabilities are $300,000 and $100,000, respectively, at the time of sale. The company sold Division M for cash $159,500. During 2024 before its sale, Division M recognized revenues of 100,000 and expenses of 61,000 (excluding income tax expense). 2. Cameron had 21,000 shares of common stock outstanding during all of 2024. It declared and paid a $1 per share cash dividend on this stock. 3. Cameron also paid $7,500 cash dividend to its preferred stockholders. Required: Assuming that all the "pretax" items are subject to a 21% income tax rate: 1. Complete the lower portion of Cameron's 2024 income statement, beginning with "Pretax Income from Continuing Operations." 2. Prepare an accompanying retained earnings statement.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter5: The Income Statement And The Statement Of Cash Flows
Section: Chapter Questions
Problem 2P
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Question
![2. At the beginning of 2024, Cameron Company's retained earnings was $212,000. For
2024, Cameron has calculated its pretax income from continuing operations to be $120,000.
During 2024, the following events also occurred:
1. During July, Cameron sold Division M (a component of the company). The book values of
Division M's assets and liabilities are $300,000 and $100,000, respectively, at the time of
sale. The company sold Division M for cash $159,500. During 2024 before its sale, Division
M recognized revenues of 100,000 and expenses of 61,000 (excluding income tax expense).
2. Cameron had 21,000 shares of common stock outstanding during all of 2024. It declared
and paid a $1 per share cash dividend on this stock.
3. Cameron also paid $7,500 cash dividend to its preferred stockholders.
Required:
Assuming that all the "pretax" items are subject to a 21% income tax rate:
1. Complete the lower portion of Cameron's 2024 income statement, beginning with "Pretax
Income from Continuing Operations."
2. Prepare an accompanying retained earnings statement.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F4e35e7cb-376f-4690-9ecc-fe62436e6781%2F5a34f7a3-5476-4c0e-bac1-6a1930583142%2Fv0pgalh_processed.jpeg&w=3840&q=75)
Transcribed Image Text:2. At the beginning of 2024, Cameron Company's retained earnings was $212,000. For
2024, Cameron has calculated its pretax income from continuing operations to be $120,000.
During 2024, the following events also occurred:
1. During July, Cameron sold Division M (a component of the company). The book values of
Division M's assets and liabilities are $300,000 and $100,000, respectively, at the time of
sale. The company sold Division M for cash $159,500. During 2024 before its sale, Division
M recognized revenues of 100,000 and expenses of 61,000 (excluding income tax expense).
2. Cameron had 21,000 shares of common stock outstanding during all of 2024. It declared
and paid a $1 per share cash dividend on this stock.
3. Cameron also paid $7,500 cash dividend to its preferred stockholders.
Required:
Assuming that all the "pretax" items are subject to a 21% income tax rate:
1. Complete the lower portion of Cameron's 2024 income statement, beginning with "Pretax
Income from Continuing Operations."
2. Prepare an accompanying retained earnings statement.
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