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    Dickinson Company reported $25 million in sales revenue and $1.5 million in net income for 2014. Net income was lower than expected due to losses from discontinued operations and an extraordinary loss from flood damage. The company also corrected prior period errors which decreased retained earnings at the start of the year.

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    Dickinson Company reported $25 million in sales revenue and $1.5 million in net income for 2014. Net income was lower than expected due to losses from discontinued operations and an extraordinary loss from flood damage. The company also corrected prior period errors which decreased retained earnings at the start of the year.

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    22 views2 pages

    Dickinson Company

    Uploaded by

    Sp Magdalena
    Dickinson Company reported $25 million in sales revenue and $1.5 million in net income for 2014. Net income was lower than expected due to losses from discontinued operations and an extraordinary loss from flood damage. The company also corrected prior period errors which decreased retained earnings at the start of the year.

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    of 2

    DICKINSON COMPANY

    Income Statement
    For the Year Ended December 31, 2014

    Sales revenue.................................................................... $25,000,000


    Cost of goods sold........................................................... 16,000,000
    Gross profit....................................................................... 9,000,000
    Selling and administrative expenses.............................. 4,700,000
    Income from operations................................................... 4,300,000
    Other revenues and gains
    Interest revenue......................................................$ 70,000
    Gain on the sale of investments........................... 110,000 180,000
    Other expenses and losses
    Write-off of goodwill............................................... 820,000
    Income from continuing operations before
       income tax....................................................................... 3,660,000
    Income tax......................................................................... 1,244,000
    Income from continuing operations................................ 2,416,000
    Discontinued operations
    Loss on operations, net of applicable tax............ 90,000
    Loss on disposal, net of applicable tax............... 440,000 (530,000)
    Income before extraordinary item................................... 1,886,000
    Extraordinary item—loss from flood
    damage, net of applicable tax...................................... 390,000
    Net income......................................................................... $ 1,496,000

    Earnings per share:


    Income from continuing operations...................... $ 4.67a
    Discontinued operations
    Loss on operations, net of tax...................... $(0.18)
    Loss on disposal, net of tax.......................... (0.88) (1.06)
    Income before extraordinary item.......................... 3.61b
    Extraordinary loss, net of tax................................. (0.78)
    Net income............................................................... $ 2.83c
    Balance, January 1, as reported............................................... $225,000*
    Correction for depreciation error (net of $10,000 tax)............ (15,000)
    Cumulative decrease in income from change in
    inventory methods (net of $14,000 tax)......................... (21,000)
    Balance, January 1, as adjusted............................................... 189,000
    Add: Net income......................................................................... 144,000**
    333,000
    Less: Dividends declared.......................................................... 100,000
    Balance, December 31............................................................... $233,000

    *($40,000 + $125,000 + $160,000) – ($50,000 + $50,000)


    **[$240,000 – (40% X $240,000)]

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