Question

Use the financial data for Randa Merchandising, Inc., in Exercise 13-13 to prepare its income statement for calendar-year 2017. (Ignore the earnings per share section.)

Short answer

The income statement is prepared, and the net income is computed as $892,000

Step-by-step solution

Step 1:Computation of Income Statement

An income statement is a financial statement prepared to show all the revenues and expenses of the period and compute net income.

Step 2:Preparation of Income Statement

Randa Manufacturing Inc.
Income Statement
For the year ended December 31, 2017
	Amount ($)	Amount ($)
Net Sales		2,900,000
Operating expenses:
Cost of goods sold	1,480,000
Depreciation expenses	232,000
Total Operating expenses		(1,712,000)
		1,188,000
Other unusual and/or infrequent gains (losses)
Gain on state’s condemnation of company property, net of tax		230,000
Loss on asset from meteor strike, net of tax		(640,000)
Income from continuing operations before taxes		778,000
Less: Income tax expenses		(217,000)
Income from continuing operations		561,000
Discontinued Segment
Loss from operating wholesale business segment net of tax	(444,000)
Gain on sale of wholesale business segment, net of tax	775,000	331,000
Net Income		892,000

Explanation about discontinued segments

It is a particular line or segment of a business having its assets and liabilities; now, selling this business line or closing down will result in gain or loss and is to be reported separately in the income statement.