Presented below is information related to Sunbuck’s Coffee Club for its fiscal year ending April 30, 2023. During the year, the Board of Directors decided to discontinue the operations of its entire line of French pastries and retain only the sales of its flavored coffee collection. In October 2022, Sunbuck’s sold the pastry operations to Twinkies Tweets Company. The following amounts were taken from Sunbuck’s general ledger
Write off of inventory due to obsolescence (I would have eaten it!) $ 35,400
Unrealized gain on foreign currency translation, before tax 16,315
Selling expenses 82,388
Sales returns and allowances 52,250
Sales 1,690,000
Retained earnings, May 1, 2022 1,242,150
Loss on the disposal of the pastry division, before tax 21,970
Interest revenue 8,873
Interest expense 6,103
Income from the operations of the pastry division, before tax 84,500
Gain on sale of investments in debt securities 25,350
Cost of goods sold 988,650
Cash dividends declared on preferred stock 8,000
Cash dividends declared on common stock 53,375
Before tax decrease in income resulting from an error in the
application of GAAP related to cash discounts in 2020 41,252
Administrative expenses 60,840
Additional information:
• All amounts are before tax. Assume a 27% tax rate when calculating income taxes.
This includes all items such as operating income, discontinued operations, other
comprehensive income and prior period adjustments if applicable.
• There are 20,000 shares of common stock outstanding for the Earnings per share (EPS)
disclosure. All EPS amounts should be rounded to pennies.
• Round all amounts to whole dollars and make sure they add up correctly.
1. Prepare an Income Statement (multi-step of course) for the year ended April 30, 2023.
2. Prepare a separate Statement of Comprehensive Income for the year ended April 30, 2023.
3. Prepare a Statement of Retained Earnings for the year ended April 30, 2023