Pronghorn Corporation was incorporated and began business on January 1, 2023. It has been successful and now requires a bank loan for additional capital to finance an expansion. The bank has requested an audited income statement for the year 2023 using IFRS. The accountant for Pronghorn provides you with the following income statement, which Pronghorn plans to submit to the bank: Sales revenue Dividend revenue Gain on recovery of earthquake loss (unusual) Unrealized holding gain on FV-OCI equity investments Less: Selling expenses Cost of goods sold Advertising expense Loss on inventory due to decline in net realizable value Loss on discontinued operations Administrative expenses Income before income tax Pronghorn Corporation Income Statement Income tax expense Net income $ 120,000 505,000 13,000 34,000 48,000 72,000 $840,000 $ 33,000 26,000 6,000 905,000 792,000 113,000 22,600 90,400 Pronghorn had 100,000 common shares outstanding during the year and has an effective tax rate of 20%. Gains/losses on FV-OCI equity investments are not recycled through net income.

Pronghorn Corporation was incorporated and began business on January 1, 2023. It has been successful and now requires a bank loan for additional capital to finance an expansion. The bank has requested an audited income statement for the year 2023 using IFRS. The accountant for Pronghorn provides you with the following income statement, which Pronghorn plans to submit to the bank: Sales revenue Dividend revenue Gain on recovery of earthquake loss (unusual) Unrealized holding gain on FV-OCI equity investments Less: Selling expenses Cost of goods sold Advertising expense Loss on inventory due to decline in net realizable value Loss on discontinued operations Administrative expenses Income before income tax Pronghorn Corporation Income Statement Income tax expense Net income $ 120,000 505,000 13,000 34,000 48,000 72,000 $840,000 $ 33,000 26,000 6,000 905,000 792,000 113,000 22,600 90,400 Pronghorn had 100,000 common shares outstanding during the year and has an effective tax rate of 20%. Gains/losses on FV-OCI equity investments are not recycled through net income.

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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