Selected Information taken from the financial statements of Verbeke Co. for the year ended December 31, 2019, follows: Gross profit General and administrative expenses Net cash used by investing activities Dividends paid Interest expense Net sales Advertising expense Accounts payable Income tax expense Other selling expenses $414,000 83,000 105,000 50,000 63,000 745,000 75,000 103,000 81,000 41,000 Required: a. Calculate Income from operations (operating Income) for the year ended December 31, 2019. Income from operations Net income b. Calculate net income for the year ended December 31, 2019.

Selected Information taken from the financial statements of Verbeke Co. for the year ended December 31, 2019, follows: Gross profit General and administrative expenses Net cash used by investing activities Dividends paid Interest expense Net sales Advertising expense Accounts payable Income tax expense Other selling expenses $414,000 83,000 105,000 50,000 63,000 745,000 75,000 103,000 81,000 41,000 Required: a. Calculate Income from operations (operating Income) for the year ended December 31, 2019. Income from operations Net income b. Calculate net income for the year ended December 31, 2019.

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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i.9
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The following are extracted from the financial statements of Shawn Co., for 2019, 2018, and 2017. 2019 2018 2017 Net sales $233,000 (124,000) (95,000) $204,000 Cost of sales (110,000) (81,500) Selling and administrative expenses Other income: Interest Other (3,700) (3,050) 1,175 $ 10,625 100 Earnings before tax and extraordinary credit Provision for income tax $ 10,400 (4,800) 5,600 (4,740) Earnings before extraordinary credit Extraordinary credit 5,885 1,510 $ 7,395 $ 5,600 Total assets $202,000 $173,000 17,400 116,800 4,000 280 $161,000 Long-term debt Common equity 24,600 123,000 15,200 112,800 4,000 280 Preferred stock 4,000 Preferred dividends 280 Required: Compute the following ratios for Shawn Co. for 2019 and 2018. 1. Return on total equity Return on common equity Gross profit margin 2. 3. b. Discuss the trend in profitability and identify specific causes for the trend.
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Carla Company’s income statement for the year ended December 31, 2020, contained the following condensed information. Service revenue $843,000 Operating expenses (excluding depreciation) $622,000 Depreciation expense 60,000 Loss on sale of equipment 26,000 708,000 Income before income taxes 135,000 Income tax expense 40,000 Net income $95,000 Carla’s balance sheet contained the following comparative data at December 31. 2020 2019 Accounts receivable $36,000 $55,000 Accounts payable 43,000 33,000 Income taxes payable 4,200 8,200 (Accounts payable pertains to operating expenses.)Prepare the operating activities section of the statement of cash flows using the indirect method.
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b. Calculate the company's net income for 2019.