Chapter 4 Homework

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Apr 3, 2024

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Chapter 4 – Income Statement and Related Information Homework Problems MGMT 35000 Spring 2023 Income from operations $7,200,000 Other expenses Unusual Loss $770,000 Write-down on Building $53,000 Other Revenues Interest Revenue $17,000 Income before tax $6,394,000 Income after tax $1,918,100 Income from continuing operations $4,475,900
Income Statement: Multi-step Sales Revenue $96,500 Cost of Goods Sold $60,570 Gross Profit $35,930 Operating Expenses: Administrative Expense $8,860 Selling Expense $17,150 Total Operating Expense $26,010 Income from Operations $9,920 Other Revenue (Expense): Rent Revenue $17,230 Interest Expense ($1,860) Total Other $15,370 Income Before Tax $25,290 Income Tax Expense $9,070 Net Income $16,220 Income Statement: Single-step Revenues: Sales Revenue $96,500 Rent Revenue $17,230 Total Revenue $113,730 Expenses: Cost of Goods Sold $60,570 Administrative Expense $8,860 Selling Expense $17,150 Income Tax expense $9,070 Interest Expense $1,860 Total Expenses $97,510 Net Income $16,220 I think I prefer the single-step income statement just because it’s a simplified version on the multi-step income statement. They both get you to the right answer of net income, I just prefer how there are less steps/categories in the single-step income statement.
EPS = Net Income – Preferred Dividends / Weighted Average of Common Shares Outstanding 202,000,000 – 4,500,000 / 10,000,000 = 19.75
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Income before income tax $240,000 Prior period adjustments ($25,000) Cumulative Decrease in inventory ($35,000) Adjusted Retained Earnings $180,000 Add Net Income $160,000 $340,000 Less Dividends Declared ($100,000) Retained Earnings $240,000 B. Total retained earnings would be $170,000 because you would subtract 70,000 from the endings retained earnings of 240,000
Common Stock $350,000 Retained Earnings $90,000 *Net Income $60,000 Accumulated other comprehensive income ($80,000) Dividends ($10,000) Total Stockholders’ Equity $410,000 *Net Income = 700,000 – 500,000 – 80,000 – 60,000