The following is information for Martinez Corp. for the year ended December 31, 2017:Net sales revenue$1,380,000Loss on inventory due to decline in netrealizable value (NRV)$84,000Unrealized gain on FV-OCIinvestments40,000Loss on sale of equipment40,000Interest income8,000Depreciation expense related to buildingsomitted by mistake in 201653,000Cost of goods sold828,000Selling expenses69,000Administrative expenses46,000Retained earnings at December 31, 2016Loss-other (due to expropriation of land)Dividends declared900,00063,00043,000Dividend revenue19,000The effective tax rate is 25% on all items. Martinez prepares financial statements in accordance with IFRS. TheFV-OCI investments trade on the stock exchange. Gains/losses on FV-OCI investments are recycled throughnet income.QUESTION: Prepare a multiple-step statement of comprehensive income for 2017, showing expenses byfunction. Ignore the calculation of EPS.

Notes:The depreciation expense related to buildings omitted by mistake in 2016 is a prior period…

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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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Kingbird Inc. reported income from continuing operations before taxes during 2017 of $2,250,000. Additional transactions Occurring in 2017 but not considered in the $2,250,000 are as follows. A gain of $125,000 (pretax) as a result of selling securities from its investment portfolio. A$27,000 loss before taxes as a result of operating the discontinued clothing division during 2017. A loss of $78,000 before taxes as a result of disposing of its clothing division. Assume that this transaction meets the criteria for discontinued operations. An uninsured $122,000 loss due to a fire. At the beginning of 2015, the corporation purchased a machine for $260,000 (salvage value of $20,000) that had a useful life of 10 years. The bookkeeper used straight-line depreciation for 2015, 2016, and 2017, but failed to deduct the salvage value in computing the depreciation base. The corporation decided to change its method of inventory pricing from average-cost to the FIFO method. The effect of this…
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The following is information for Novak Corp. for the year ended December 31, 2020: Sales revenue $1,420,000 Loss on inventory due to decline in net realizable value $70,000 Unrealized gain on FV-OCI equity investments 46,000 Loss on disposal of equipment 45,000 Interest income 9,000 Depreciation expense related to buildings omitted by mistake in 2019 56,000 Cost of goods sold 852,000 Retained earnings at December 31, 2019 950,000 Selling expenses 71,000 Loss from expropriation of land 57,000 Administrative expenses 52,000 Dividends declared 46,000 Dividend revenue 15,000 The effective tax rate is 25% on all items. Novak prepares financial statements in accordance with IFRS. The FV-OCI equity investments trade on the stock exchange. Gains/losses on FV-OCI investments are not recycled through net income. a)Prepare the retained earnings section of the statement of changes in equity for 2020. (List…
Direct and Indirect Methods Dauve Company reported the following condensed income statement for 2016: Sales $100,000 Cost of goods sold (58,000) Gross profit $42,000 Operating expenses: Depreciation expense $8,000 Salaries expense 12,000 (20,000) Income before income taxes $22,000 Income tax expense (6,600) Net income $15,400 During 2016, the following changes occurred in the company's current assets and current liabilities: Increase (Decrease) Cash $3,700 Accounts receivable (5,500) Inventories 8,900 Accounts payable (purchases) (4,600) Salaries payable 2,800 Required: 1. By visual inspection, prepare the net cash flow from the operating activities section of Dauve's 2016 statement of cash flows using the indirect method. Use a minus sign to indicate cash outflows or decreases in cash.
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…
Accrual Basis Income Statement for the Year Ended December 31, 2012. Net sales $900,000 Expenses Cost of goods sold 550,000 Selling and administrative expense 133,000 Total expenses 683,000 Income before income taxes 217,000 Income taxes 65,400 Net income $151,600 Other data: a. Cost of goods sold includes depreciation expense of $20.000. b. Selling and administrative expense includes goodwill amortization of 10,000. c. Decrease in deferred income taxes (a liability account), $5,000. d. Increase in accounts receivable, $20,000. e. Increase in accounts payable, $10.000. f. Increase in inventories, $30,000. g. Decrease in income taxes payable, $20.000. Required: 2. Prepare the cash flows from operating activities using the indirect approach.
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
Shamrock Inc. reported income from continuing operations before taxes during 2017 of $ 2,175,000. Additional transactions occurring in 2017 but not considered in the $ 2,175,000 are as follows. 1. A gain of $ 109,000 (pretax) as a result of selling securities from its investment portfolio. 2. A $ 27,000 loss before taxes as a result of operating the discontinued clothing division during 2017. 3. A loss of $ 88,000 before taxes as a result of disposing of its clothing division. Assume that this transaction meets the criteria for discontinued operations. 4. An uninsured $ 128,000 loss due to a fire. 5. At the beginning of 2015, the corporation purchased a machine for $ 220,000 (salvage value of $ 40,000) that had a useful life of 10 years. The bookkeeper used straight-line depreciation for 2015, 2016, and 2017, but failed to deduct the salvage value in computing the depreciation base. 6. The corporation decided to change its method of inventory pricing from…
Use the following information to answer this question. Windswept, Inc.2017 Income Statement($ in millions) Net sales $ 9,000 Cost of goods sold 7,350 Depreciation 360 Earnings before interest and taxes $ 1,290 Interest paid 87 Taxable income $ 1,203 Taxes 421 Net income $ 782 Windswept, Inc.2016 and 2017 Balance Sheets($ in millions) 2016 2017 2016 2017 Cash $ 160 $ 190 Accounts payable $ 1,150 $ 1,332 Accounts rec. 840 740 Long-term debt 1,000 1,233 Inventory 1,570 1,565 Common stock 3,190 2,910 Total $ 2,570 $ 2,495 Retained earnings 470 720 Net fixed assets 3,240 3,700 Total assets $ 5,810 $ 6,195 Total liab. & equity $ 5,810 $ 6,195 What is the equity multiplier for 2017?
5
The following data relate to the operations of Delicious, Inc., during 2015. Continuing operations: Net sales $37,400,000 Costs and expenses (including applicable income tax) 21,500,000 Other data: Operating income during 2015 on segment of the business Discontinued near year-end 205,000 Loss on disposal of discontinued segment (net of income tax benefit 510,000 Extraordinary loss (net of income tax benefit) 930,000 Prior period adjustment (increase in 2014 amortization expense, net of income tax benefit 310,000 Cash dividend declared 2,000,000 a)Prepare a condensed income statement for 2015

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