Shown below is an income statement for 2016 that was prepared by a poorly trainedbookkeeper of Hutton Corporation.Hutton CorporationINCOME STATEMENTDecember 31, 2016Sales revenue$945,000Investment revenue19,500Cost of merchandise sold(408,500)Selling expenses(145,000)Administrative expense(285,000)Interest expense(13,000)Income before special items 113,000Special itemsLoss on disposal of a component of the business (30,000)Net federal income tax liabilityNet income(24,900)$58,100Prepare a multiple-step income statement, in good form, for 2016 for Hutton Corporationthat is presented in accordance with generally accepted accounting principles (includingformat and terminology). Hutton Corporation has 25,000 shares of common stockoutstanding and has a 30% federal income tax rate on all tax related items. Round allearnings per share figures to the nearest cent.

Part 2: Explanation:Step 1: Begin with sales revenue and deduct the cost of merchandise sold to…

Answered: Shown below is an income statement 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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what is the net effect of the errors in the 2018 net income?
The following information is related to Windsor Company for 2017. Retained earnings balance, January 1, 2017 $998,500 Sales Revenue 26,110,000 Cost of goods sold 16,240,000 Interest revenue 77,200 Selling and administrative expenses 4,748,000 Write-off of goodwill 837,500 Income taxes for 2017 1,254,000 Gain on the sale of investments 111,600 Loss due to flood damage 400,100 Loss on the disposition of the wholesale division (net of tax) 441,500 Loss on operations of the wholesale division (net of tax) 93,200 Dividends declared on common stock 251,800 Dividends declared on preferred stock 85,800 Windsor Company decided to discontinue its entire wholesale operations (considered a discontinued operation) and to retain its manufacturing operations. On September 15, Windsor sold the wholesale operations to Rogers Company. During 2017, there were 494,700 shares of common stock outstanding all year. (a1) Prepare a multiple-step…
In December 2013, JB Masterpiece Merchandise Inc. had a significant portion of its inventory stolen. The company determined the cost of inventory remaining to be $32,400. The following information was taken from the records of the company: Purchases... Purchase returns and allowances. Sales.. **** Sales returns and allowances. Salaries.... Rent. Insurance Utilities.. ..... Jan. 1, 2013 to Date of Theft $141,670 . 7,250 05: (15 Mark) 275,600 3,400 . 10,100 . 5,340 .. 1,030 .. 1,115 4,925 1,890 .. 74,620 Advertising. Depreciation expense Beginning inventory Required: Estimate the cost of the stolen inventory. 2012 $156,430 6.580 283,300 2,900 12,900 7,120 1.340 1,435 3,741 2,106 69,780
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For the fiscal year ended December 31, 2015, Brace Incorporated reported: • Net income of $6,000, which includes Depreciation expense totaling $1,200 • A loss on sale of equipment of $200 The company did not use or receive cash for any investing or financing activities. Relevant excerpts from Brace's balance sheets for 2015 and 2014 are as follows: Balance at Balance at Year-end Year-end 2014 2015 Accounts Receivable 2,000 Inventory 4,000 Prepaid Insurance 700 Accounts Payable 1,000 Wages Payable 2,900 Unearned Revenue 600 3,000 2,000 620 1,200 2,700 900
James Dalton prepared draft accounts for his business for the year ended 31.12.20. According to the draft accounts, his profit for the year amounted to €23,000. The following mistakes have now been discovered. (1) An item purchased at the beginning of the year for €1,800 had been charged to revenue instead of being capitalised and depreciated at the rate of 10% per annum. (2) No record had been made of goods costing €200 which had been withdrawn by Mr Dalton for his own use. (3) Goods sold for €300 had been returned and included in the closing stock at their cost of €240. The value of the goods was nil. No entries had been made in the books to record their return by the customer. (4) A cheque for €100 was issued to a supplier but no entry had been made in the books to record the transaction. (5) On 31 December a second hand delivery van was purchased at a price of €2,800. This van was intended to replace an old one which had a written down value of €800 at that date. The new van was…
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Presented below are selected accounts of Novak Company at December 31, 2017. Inventory (finished goods) $ 53,500 Cost of Goods Sold $2,192,400 Unearned Service Revenue 95,200 Notes Receivable 41,000 Equipment 257,100 Accounts Receivable 161,020 Inventory (work in process) 36,000 Inventory (raw materials) 182,280 Cash (not including restricted cash) 43,800 Supplies Expense 65,490 Debt Investments (trading) 39,500 Allowance for Doubtful Accounts 11,290 Customer Advances 53,200 Licenses 16,890 Restricted Cash for Plant Expansion 58,300 Additional Paid-in Capital 88,040 Treasury Stock 22,320 The following additional information is available. 1. Inventories are valued at lower-of-cost-or-market using LIFO. 2. Equipment is recorded at cost. Accumulated depreciation, computed on a straight-line basis, is $47,568. 3. The short-term investments have a fair value of $29,730. 4. The notes receivable are due April 30, 2019, with interest receivable every April 30. The notes bear interest at 6%.…
Duke Company’s records show the following account balances at December 31, 2021: Sales revenue $ 16,200,000 Cost of goods sold 9,600,000 General and administrative expense 1,060,000 Selling expense 560,000 Interest expense 760,000 Income tax expense has not yet been determined. The following events also occurred during 2021. All transactions are material in amount. $360,000 in restructuring costs were incurred in connection with plant closings. Inventory costing $460,000 was written off as obsolete. Material losses of this type are considered to be unusual. It was discovered that depreciation expense for 2020 was understated by $56,000 due to a mathematical error. The company experienced a negative foreign currency translation adjustment of $260,000 and had an unrealized gain on debt securities of $240,000. Required:Prepare a single, continuous multiple-step statement of comprehensive income for 2021. The company’s effective tax rate on all items…
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