The Income Statement for Lifeline Products in Single-Step Format Follows

The income statement for Lifeline Products in single-step format follows. $\begin{array}{c}\text {Lifeline Products}\\ \text { Income Statement}\\ \text { For the Year Ended December 31, 2012}\\\begin{array}{lll} \text {Revenues:}\\ \text {Sales}\\ \text {Rent Income}\\\\ \text {Costs and Expenses:}\\ \text {Cost of Sales}\\ \text {Selling and Administrative Expenses}\\ \text {Interest Expense}\\ \text {Loss on the Sale of Plant Assets}\\\\ \text {Income Before Taxes}\\ \text {Income Taxes}\\ \text {Net Income}\\ \text {Earnings per Share}\end{array}\begin{array}{r}\\\$ 3,000,000 \\\underline{14,000} \\\$ 3,014,000 \\2,370,000 \\322,000 \\48,000 \\\underline{16,000} \\\underline{ \$ 2,756,000} \\\underline{\$ \quad 258,000} \\\underline{112,000} \\\underline{ \$ \quad 146,000} \\\underline{ \$ \quad 7,30}\end{array}\end{array}$

Required:
a.Convert the statement to multiple-step format.
b.Recompute net income with the unusual loss removed.
c.Why may net income with the unusual loss removed be preferable to use for trend analysis?
d.Speculate on why this loss is not considered extraordinary or as a disposal of a segment.

Correct Answer:

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a.Lifeline Products
Income Statement (Mu...

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