Partial income statements for Sherwood Company summarized for a four-year period show the following:2018201920202021$ 2,300,0001,472,000$ 2,700,0001,701,000$ 2,800,0001,820,000$ 3,300,0002,112,000Net SalesCost of Goods SoldGross Profit$ 828,000$ 999,000$ 980,000$ 1,188,000An audit revealed that in determining these amounts, the ending inventory for 2019 was overstated by $21,200. The inventory balanceon December 31, 2020, was accurately stated. The company uses a periodic inventory system.Required:1. Restate the partial income statements to reflect the correct amounts, after fixing the inventory error.2-a. Compute the gross profit percentage for each year (a) before the correction and (b) after the correction.2-b. Do the results lend confidence to your corrected amounts? Complete this question by entering your answers in the tabs below.Req 1Req 2AReq 2BRestate the partial income statements to reflect the correct amounts, after fixing the inventory error.SHERWOOD COMPANYIncome Statements (Corrected)2018201920202021Net SalesCost of Goods SoldGross Profit< Req 1Req 2A >

A partial income statement presents data for only a portion of a standard accounting period. This…

Answered: Partial income statements for Sherwood…

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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Martinez Industries had the following operating results for 2021: Sales = $33,308; Cost of goods sold = $23,722; Depreciation expense = $5,897; Interest expense = $2,660; Dividends paid = $1,906. At the beginning of the year, net fixed assets were $19,840, current assets were $6,984, and current liabilities were $3,932. At the end of the year, net fixed assets were $24,412, current assets were $8,624, and current liabilities were $4,583. The tax rate for 2021 was 22 percent. a. What is net income for 2021? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) b. What is the operating cash flow for 2021? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) c. What is the cash flow from assets for 2021? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) d-1. If no new debt…
The 2021 income statement of Adrian Express reports sales of $15,960,000, cost of goods sold of $9,600,000, and net income of $1,600,000. Balance sheet information is provided in the following table. ADRIAN EXPRESS Balance Sheets December 31, 2021 and 2020 2021 2020 Assets Current assets: Cash Accounts receivable $ 600,000 $ 760,000 1,400,000 1,800,000 4,800,000 $8,600,000 1,000,000 1,400,000 4,240,000 $7,400,000 Inventory Long-term assets Total assets Liabilities and Stockholders' Equity Current liabilities $2,020,000 2,300,000 2,000,000 2,280,000 $8,600,000 $1,660,000 2,400,000 2,000,000 1,340,000 $7,400,000 Long-term liabilities Common stock Retained earnings Total liabilities and stockholders' equity Industry averages for the following four risk ratios are as follows: Average collection period Average days in inventory Current ratio 25 days 60 days 2 to 1 50% Debt to equity ratio
Selected comparative financial statements of Korbin Company follow. KORBIN COMPANY Comparative Income Statements For Years Ended December 31 2021 Sales $ 562,795 2019 $ 299,200 338,803 Cost of goods sold Gross profit 191,488 223,992 107,712 Selling expenses 79,917 39,494 Administrative expenses 50,652 24,834 Total expenses 130,569 64,328 Income before taxes 93,423 43,384 Income tax expense 17,377 8,807 Net income $ 76,046 $ 34,577 KORBIN COMPANY Comparative Balance Sheets December 31 2021 2020 Assets Current assets $ 38,127 $ 56,965 0 Long-term investments 700 97,740 Plant assets, net Total assets 107,436 $164,401 $ 136,567 Liabilities and Equity Current liabilities $ 20,348 Common stock 68,000 $ 24,003 68,000 8,500 63,898 Other paid-in capital 8,500 Retained earnings 39,719 Total liabilities and equity $164,401 $ 136,567 2020 $431,147 273,778 157,369 59,498 37,941 97,439 59,930 12,286 $ 47,644 2019 $ 50,967 4,550 57,629 $ 113,146 $ 19,801 50,000 5,556 37,789 $113,146 4
Income statement data for Winthrop Company for two recent years ended December 31, are as follows: Current Year Previous Year Sales $541,800 $430,000 Cost of goods sold 458,800 370,000 Gross profit $83,000 $60,000 Selling expenses $24,360 $21,000 Administrative expenses 21,080 17,000 Total operating expenses $45,440 $38,000 Income before income tax $37,560 $22,000 Income tax expenses 15,000 8,800 Net income $22,560 $13,200 a. Prepare a comparative income statement with horizontal analysis, indicating the increase (decrease) for the current year when compared with the previous year. If required, round to one decimal place. Winthrop Company Comparative Income Statement For the Years Ended December 31 Current Previous Increase Increase year year (Decrease) (Decrease) Amount Amount Amount Percent Sales $541,800 $430,000 % Cost of goods sold 458,800 370,000 Gross profit $83,000 $60,000 % Selling expenses $24,360 $21,000 % Administrative expenses 21,080 17,000 % Total operating expenses…
Income statement data for Winthrop Company for two recent years ended December 31 are as follows: Current Year Previous Year Sales $2,280,000 $2,000,000 Cost of merchandise sold 1,960,000 1,750,000 Gross profit $320,000 $250,000 Selling expenses $156,500 $125,000 Administrative expenses 122,000 100,000 Total operating expenses $278,500 $225,000 Income before income tax expense $41,500 $25,000 Income tax expenses 16,600 10,000 Net income $24,900 $15,000 a. Prepare a comparative income statement with horizontal analysis, indicating the increase (decrease) for the current year when compared with the previous year. If required, round to one decimal place. Winthrop CompanyComparative Income StatementFor the Years Ended December 31 CurrentyearAmount PreviousyearAmount Increase(Decrease)Amount Increase(Decrease)Percent Sales $2,280,000 $2,000,000 $fill in the blank 292facfcbfc4faf_1 fill…
Horizontal Analysis of the Income Statement Income statement data for Winthrop Company for two recent years ended December 31, are as follows: Current Year Previous Year Sales $418,200 $340,000 Cost of goods sold 350,900 290,000 Gross profit $67,300 $50,000 Selling expenses $19,210 $17,000 Administrative expenses 16,940 14,000 Total operating expenses $36,150 $31,000 Income before income tax $31,150 $19,000 Income tax expenses 12,500 7,600 Net income $18,650 $11,400 a. Prepare a comparative income statement with horizontal analysis, indicating the increase (decrease) for the current year when compared with the previous year. If required, round to one decimal place. Winthrop Company Comparative Income Statement For the Years Ended December 31 CurrentyearAmount PreviousyearAmount Increase(Decrease)Amount Increase(Decrease)Percent Sales $418,200 $340,000 $fill in the blank…
In its income statement for the year ended December 31, 2022, Cullumber Company reported the following condensed data. Operating expenses $ 710,000 Interest revenue $ 23,000 Cost of goods sold 1,246,000 Loss on disposal of plant assets 7,000 Interest expense 60,000 Net sales 2,190,000 Income tax expense 35,000 Other comprehensive income (net of $1,200 tax) 7,300 (a) Prepare a multiple-step income statement.
Use the following information from Eiffel Company's financial statements. 2018 Income Balance Statement Sheets Sales $309,000 Cost of Goods Sold (145,000) Operating Expenses, other than Depreciation Expense (27,000) Depreciation expense (15,000) Gain on Sale of Plant Assets 18,000 Net Income $140,000 Dec. 31,2018 Accounts Receivable $47,300 Inventory 1,600 Accounts Payable 24,500 Accured Liabilities 900 Dec. 31, 20O17 Accounts Receivable $23,250 Inventory 1,800 Accounts Payable 23,250 Accured Liabilities 1,150 Prepare the operating activities section of the statement of cash flows (indirect method) for tlte year 2018. U cash or cash payments. Eiffel Company
Income statement data for Winthrop Company for two recent years ended December 31 are as follows: 1 Current Year Previous Year 2 Sales $1,596,000.00 $1,400,000.00 3 Cost of goods sold 1,316,700.00 1,197,000.00 4 Gross profit $279,300.00 $203,000.00 5 Selling expenses $76,950.00 $67,500.00 6 Administrative expenses 55,000.00 50,000.00 7 Total operating expenses $131,950.00 $117,500.00 8 Income before income tax $147,350.00 $85,500.00 9 Income tax expense 11,060.00 7,000.00 10 Net income $136,290.00 $78,500.00 A. Prepare a comparative income statement with horizontal analysis, indicating the increase (decrease) for the current year when compared with the previous year. Round percentages to one decimal place. B. What conclusions can be drawn from the horizontal analysis? Round the answers to one decimal place.
Selected information about income statement accounts for the Reed Company is presented below (the company's fiscal year ends on December 31): Sales revenue Cost of goods sold Administrative expense Selling expense Interest revenue Interest expense Loss on sale of assets of discontinued component 2024 2023 $5,250,000 $4,350,000 2,170,000 3,030,000 970,000 845,000 530,000 472,000 167,000 157,000 234,000 Sales revenue Cost of goods sold Administrative expense Selling expense Operating income before taxes On July 1, 2024, the company adopted a plan to discontinue a division that qualifies as a component of an entity as defined by GAAP. The assets of the component were sold on September 30, 2024, for $116,000 less than their book value. Results of operations for the component (included in the above account balances) were as follows: 234,000 116,000 1/1/2024-9/30/2024 $ 570,000 (375,000) (67,000) (37,000) $ 91,000 2023 $ 670,000 (422,000) (57,000) (37,000) $ 154,000 In addition to the…
Condensed income statements for Jennifer Corporation are shown below for two years. Sales Cost of Goods Sold Gross Profit Operating Expense Net Income 2021 $90,000 54,000 $36,000 18,000 $18,000 Corrected net income Compute the corrected net income for 2021 and 2022 assuming that the inventory at the end of 2021 was mistakenly overstated by $6,000. 2021 2022 $108,000 64,800 $43,200 18,000 $25,200 S 2022 S

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