Delta Oil Company uses the successful-efforts method to account for oil exploration costs. Delta started business in 2014 and prepared the following income statements:DELTA OIL COMPANYIncome StatementsFor the Years Ended December 31, 2014 - 2015120142015Revenue$1,000,000.00$3,000,000.00Other expenses400,000.001,300,000.004 Exploration expenses120.000.00238.000.00Income before income taxes$480,000.00$1,462,000.005Income tax expense (30%)144,000.00438.600.006Net income$336,000.00$1,023,400.00Earnings per share$3.36$10.23The company chose to change to the full-cost method at the beginning of 2016. Under the full-cost method, Delta capitalizes all exploration costs of the Oil and Gas Properties asset account on its balance sheet.determines the exploration and amortization expenseamounts under the full-cost method to be as follows:201420152016Exploration expensesO$0SOAmortization expense8,00018,20042,000In addition, Delta reported revenue of $9,000,000 and other expenses of $4,200,000 in 2016. With the 2016 financial statements, the company issues comparative statements for the previous 2 years.Required:1. Prepare the journal entry to refiect the change.2. Prepare the comparative income statements and the comparative statements of retained earnings for 2016, 2015, and 2014. Notes to thefinancial statements are not necessary.3. Next Level Discuss the advantages and disadvantages of accounting for a change in this manner.

The process of recording business transactions in the books of accounts for the first time is known…

Answered: DELTA OIL COMPANY Income Statements For…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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You have just obtained financial information for the past 2 years for Treet Corporation. Treet Corporation Income Statements For Year Ending December 31 (Millions Of Dollars) 2012 2011 Sales 3,000.00 3,500.00 Operating costs (excluding depreciation and amortization) 2,500.00 3,100.00 EBITDA 500.00 400.00 Depreciation and amortization 90.00 75.00 Earnings before interest and taxes 410.00 325.00 Interest 70.00 60.00 Earnings before taxes 340.00 265.00 Taxes (40%) 136.00 126.00 Net income available to common stockholders 204.00 139.00 Common dividends 180.00 13.20 Treet Corporation Balance Sheets As at December 31 (Millions Of Dollars) 2012 2013 Assets: Cash and marketable securities 120.00 30.00 Accounts receivable 540.00 400.00 Inventories 540.00 620.00…
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Years Revenue Cash Expense Book Depreciation Book Income Pre-Tax Book Tax at 32% After Tax Book Income Financial Measures Profit Margin % Net Assets ROA % Cashflow Revenue Cash Expense Tax Depreciation Pretax Income Tax at 32% After Tax Income After Tax Cashflow Cumulative Cashflow Payback Period Present Worth 10 PW12 PW15 IRR PV Index(15) Facility Cost Income Tax Rate 0 C. -9.5 d. -12.4 $ 100,000.00 2.2 Years 91740.92679 0.395702526 1 0.684350818 $ 100,000.00 32% $30,000.00 $100,000.00 $120,000.00 $140,000.00 $150,000.00 $150,000.00 $50,000.00 $60,000.00 $70,000.00 $75,000.00 $75,000.00 2 $20,000.00 $20,000.00 $20,000.00 $20,000.00 $20,000.00 $0.20 $20,400.00 $27,200.00 $0.26 $9,600.00 $12,800.00 $16,000.00 $17,600.00 $17,600.00 $20,400.00 ($100,000.00) $40,400.00 $51,040.00 ($100,000.00) -$59,600.00 -$8,560.00 $40,000.00 $50,000.00 $55,000.00 $55,000.00 $0.23 3 $0.45 $36,727.27 $80,000.00 $60,000.00 $40,000.00 $20,000.00 $0.85 $1.87 4 $19,040.00 5 $34,000.00 $37,400.00 $0.24…
e and Environment of Financial Management The Congo Mining Company Income Statement for Years Ending 12/31/2017 and 12/31/2018 2018 2017 $1,650 $1.300 950 $ 700 $ 45 Sales 750 Cost of goods sold $ 550 Gross profit %24 35 Operating expenses 255 265 Depreciation expense $ 45 Operating profits $ 285 65 $ 380 Interest expense 55 Profit before taxes $ 230 46 76 Taxes (20%) Net income $ 184 $ 304 * 15% of sales are cash sales, with the remaining 85% being credit sales. 4-10. (Evaluating current and proforma profitability) (Financial ratios-investment anal- ysis) The annual sales for Saudi Aramco Corporation were $4.7 million last year. All sales are on credit. The firm's end-of-year balance sheet was as follows: Current assets $ 520,000 Liabilities $1,200,000 Net fixed assets 1.600,000 Owners' equity 920,000 $2.120,000 $2.120.000 The firm's income statement for the year was as follows: Sales $ 4.550,000 Less cost of goods sold (3,560,000) $ 990,000 Gross profit Less operating expenses…
Sales Costs Other expenses Earnings before interest and taxes Interest paid Taxable income Taxes (21%) Net income Dividends Addition to retained earnings Current assets Cash CROSBY, INCORPORATED 2023 Income Statement Accounts receivable Inventory Total Total assets Assets Fixed assets Net plant and equipment EFN $ 21,340 44,280 98,960 $ 164,580 $ 430,000 $ 28,203 65,807 $ 594,580 $ 754,000 589,000 25,000 $ 140,000 21,000 CROSBY, INCORPORATED Balance Sheet as of December 31, 2023 $ 119,000 24,990 $ 94,010 Liabilities and Owners' Equity Current liabilities Accounts payable Notes payable Total Long-term debt Owners' equity Common stock and paid-in surplus Accumulated retained earnings Total Total liabilities and owners' equity $ 55,500 14,700 $ 70,200 $ 137,000 $ 118,000 269,380 $ 387,380 $ 594,580 If the firm is operating at full capacity and no new debt or equity is issued, what is the external financing needed to support the 25 percent growth rate in sales? Note: Do not round…

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