Intermediate Accounting
9th Edition
ISBN: 9781259722660
Author: J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher: McGraw-Hill Education
expand_more
expand_more
format_list_bulleted
Videos
Textbook Question
Chapter 4, Problem 4.1E
Operating versus Nonoperating Income
• LO4–1
Pandora Corporation operates several factories in the Midwest that manufacture consumer electronics. The December 31, 2018, year-end
| Account Title | Debits | Credits |
| Sales revenue | 12,500,000 | |
| Interest revenue | 50,000 | |
| Loss on sale of investments | 100,000 | |
| Cost of goods sold | 6,200,000 | |
| Selling expenses | 620,000 | |
| General and administrative expenses | 1,520,000 | |
| Interest expense | 40,000 | |
| Research and development expense | 1,200,000 | |
| Income tax expense | 900,000 |
Required:
Calculate the company’s operating income for the year.
Expert Solution & Answer
Trending nowThis is a popular solution!
Students have asked these similar questions
Exercise 9-12 (Algo) Calculate gross profit, cost of goods sold, and selling price LO 9-2, 9-3
MBI Incorporated had sales of $36 million for fiscal 2022. The company's gross profit ratio for that year was 26%.
Required:
a. Calculate the gross profit and cost of goods sold for MBI for fiscal 2022.
b. Assume that a new product is developed and that it will cost $488 to manufacture. Calculate the selling price that must be set for
this new product if its gross profit ratio is to be the same as the average achieved for all products for fiscal 2022.
c. From a management viewpoint, it could use the estimated selling price as a "target" in conducting marketing research studies to
assess its ultimate prospects for success at this price.
Complete this question by entering your answers in the tabs below.
Required A Required B
Required C
Calculate the gross profit and cost of goods sold for MBI for fiscal 2022.
Note: Enter your answers in millions rounded to 2 decimal places. (i.e., 5,500,000…
what goes in the two yellow cells?
What advice would you give to Juirgen
PROBLEM 17-19 Incomplete Statements; Analysis of Ratios [LO2, LO3, L04]
Incomplete financial statements for Tanner Company are given below:
Tanner Company
Income Statement
For the Year Ended December 31
Revenue.
$2,700,000
Cost of goods sold..
Gross margin.
Selling and administrative expenses . .
?
Net operating income
Interest expense
45,000
Net income before taxes
?
Income taxes, 40%.
?
Net income
2$
?
Scanned by CamScanı
Financial Staterment Analysis
923
Tanner Company
Balance Sheet.
December 31
Non-current Assets:
Plant and equipment, net
Current assets:
Accounts receivable, net . .
Inventory..
Cash and cash equivalents.
Total current assets
$ ?
Total assets
$ ?
Equity:
Common stock, $2.50 par value
Retained earnings
Total equity . . ..
Bonds payable, 10%
Current liabilities
?
$250,000
Total liabilities.
?
Total equity and liabilities
$ ?
The following additional information is available about the company:
Selected financial ratios computed…
Chapter 4 Solutions
Intermediate Accounting
Ch. 4 - The income statement is a change statement....Ch. 4 - What transactions are included in income from...Ch. 4 - Prob. 4.3QCh. 4 - Prob. 4.4QCh. 4 - Prob. 4.5QCh. 4 - What are restructuring costs and where are they...Ch. 4 - Define intraperiod tax allocation. Why is the...Ch. 4 - How are discontinued operations reported in the...Ch. 4 - What is meant by a change in accounting principle?...Ch. 4 - Prob. 4.10Q
Ch. 4 - The correction of a material error discovered in a...Ch. 4 - Define earnings per share (EPS). For which income...Ch. 4 - Prob. 4.13QCh. 4 - Describe the purpose of the statement of cash...Ch. 4 - Prob. 4.15QCh. 4 - Explain what is meant by noncash investing and...Ch. 4 - Distinguish between the direct method and the...Ch. 4 - Prob. 4.18QCh. 4 - Prob. 4.19QCh. 4 - Show the calculation of the following...Ch. 4 - Show the DuPont frameworks calculation of the...Ch. 4 - Prob. 4.22QCh. 4 - Prob. 4.23QCh. 4 - Prob. 4.1BECh. 4 - Multiple -step income statement LO41, LO43 Refer...Ch. 4 - Prob. 4.3BECh. 4 - Multiple -step income statement LO41, LO43 The...Ch. 4 - Prob. 4.5BECh. 4 - Prob. 4.6BECh. 4 - Prob. 4.7BECh. 4 - Discontinued operations LO44 Refer to the...Ch. 4 - Discontinued operations LO44 Refer to the...Ch. 4 - Prob. 4.10BECh. 4 - Prob. 4.11BECh. 4 - Prob. 4.12BECh. 4 - Statement of cash flows; indirect method LO48 Net...Ch. 4 - Prob. 4.14BECh. 4 - Prob. 4.15BECh. 4 - Profitability ratios LO410 The 2018 income...Ch. 4 - Prob. 4.17BECh. 4 - Inventory turnover ratio LO410 During 2018, Rogue...Ch. 4 - Operating versus Nonoperating Income LO41 Pandora...Ch. 4 - Income statement format; single step and multiple...Ch. 4 - Income statement format; single step and multiple...Ch. 4 - Multiple-step continuous statement of...Ch. 4 - Income statement presentation LO41, LO45 The...Ch. 4 - Prob. 4.6ECh. 4 - Income statement presentation; discontinued...Ch. 4 - Discontinued operations; disposal in subsequent...Ch. 4 - Discontinued operations; disposal in subsequent...Ch. 4 - Earnings per share LO45 The Esposito Import...Ch. 4 - Comprehensive income LO46 The Massoud Consulting...Ch. 4 - Prob. 4.12ECh. 4 - Prob. 4.13ECh. 4 - IFRS; statement of cash flows LO48, LO49 Refer to...Ch. 4 - Prob. 4.15ECh. 4 - Prob. 4.16ECh. 4 - Statement of cash flows; indirect method LO48...Ch. 4 - Prob. 4.18ECh. 4 - Prob. 4.19ECh. 4 - Statement of cash flows; indirect method LO48...Ch. 4 - Statement of cash flows; direct method LO48 Refer...Ch. 4 - Prob. 4.22ECh. 4 - Prob. 4.23ECh. 4 - Concepts; terminology LO41, LO42, LO43, LO44,...Ch. 4 - Inventory turnover; calculation and evaluation ...Ch. 4 - Evaluating efficiency of asset management LO410...Ch. 4 - Profitability ratios LO410 The following...Ch. 4 - Prob. 4.28ECh. 4 - Prob. 4.29ECh. 4 - Prob. 4.30ECh. 4 - Prob. 4.31ECh. 4 - Prob. 4.32ECh. 4 - Comparative income statements; multiple-step...Ch. 4 - Discontinued operations LO44 The following...Ch. 4 - Income statement presentation; Discontinued...Ch. 4 - Restructuring costs; Discontinued operations;...Ch. 4 - Income statement presentation; Restructuring...Ch. 4 - Income statement presentation; Discontinued...Ch. 4 - Income statement presentation; statement of...Ch. 4 - Multiple-step statement of income and...Ch. 4 - Statement of cash flows LO48 The Diversified...Ch. 4 - Integration of financial statements; Chapters 3...Ch. 4 - Statement of cash flows; indirect method LO48...Ch. 4 - Calculating activity and profitability ratios ...Ch. 4 - Use of ratios to compare two companies in the same...Ch. 4 - Creating a balance sheet from ratios; Chapters 3...Ch. 4 - Prob. 4.15PCh. 4 - Interim financial reporting Appendix 4 Branson...Ch. 4 - Prob. 4.1BYPCh. 4 - Judgment Case 42 Restructuring costs LO43 The...Ch. 4 - Prob. 4.3BYPCh. 4 - Prob. 4.4BYPCh. 4 - Prob. 4.5BYPCh. 4 - Prob. 4.6BYPCh. 4 - Prob. 4.7BYPCh. 4 - IFRS Case 48 Statement of cash flows;...Ch. 4 - Judgment Case 49 Income statement presentation;...Ch. 4 - Prob. 4.10BYPCh. 4 - Integrating Case 412 Balance sheet and income...Ch. 4 - Prob. 4.13BYPCh. 4 - Prob. 4.17BYPCh. 4 - Prob. 4.18BYPCh. 4 - Continuing Cases Target Case LO43, LO44, LO46,...
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- A9arrow_forwardChapter 17 Revenue and expense data for the current calendar year for Smith Electronics Company and for the electronics industry are as follows. The Smith Electronics Company data are expressed in dollars. The electronics Industry averages are expressed in percentages. Smith Electronics Electronics Industry Company Average $3,142,000 103.0% Sales 3.0% 150,000 Sales returns and allowances $2,992,000 100.0% Net sales 60.0% 1,850,000 Cost of goods sold 40.0% $1,142,000 Gross profit $750,000 23.0% Selling expenses 257,000 10.0% Administrative expenses 33.0% $1,007,000 Total operating expenses 7.0% $135,000 Operating income Other income 50,000 1.5% $185,000 8.5% 42,500 1.0% Other expense Income before income tax $142,500 7.5% Income tax expense 5.0% 76,000 $66,500 Net Income 2.5% a. Prepare a common-sized income statement comparing the results of operations for Smith Electronics Company with the industry average Round to one decimal place. b. As far as the data permit, comment on…arrow_forward5 ! Part 5 of 15 0.4 points eBook Print References Required information [The following information applies to the questions displayed below.] Westerville Company reported the following results from last year's operations: Sales Variable expenses Contribution margin Fixed expenses Net operating income Average operating assets $ 1,400,000 680,000 720,000 440,000 $ 280,000 $875,000 At the beginning of this year, the company has a $300,000 investment opportunity with the following cost and revenue characteristics: Sales $ 480,000 Contribution margin ratio Fixed expenses 80 % of sales $ 336,000 The company's minimum required rate of return is 15%. 5. What is the turnover related to this year's investment opportunity? Note: Round your answer to 1 decimal place. Turnoverarrow_forward
- wo years. EXERCISE 15-2 Financial Ratios for Assessing Liquidity LO15-2 ending December 31 appear below. The company did not issue any new common stock during the payable was 12%, the income tax rate was 40%, and the dividend per share of common stock was this year was $18. All of the company’s sales are on account. year Deceof 800,000 shares of common stock were outstanding, The interest rate on the bond year. $0.75 last year and $0.40 this year. The market value of the company's common stock at the end of Weller Corporation Comparative Balance Sheet (dollars in thousands) This Year Last Year Assets Current assets: Cash .... $ 1,280 $ 1,560 Accounts receivable, net 12,300 9,100 Inventory .... 9,700 8,200 Prepaid expenses 1,800 2,100 Total current assets 25,080 20,960 Property and equipment: Land ..... 6,000 6,000 Buildings and equipment, net .. 19,200 19,000 epeA Total property and equipment ... 25,200 25,000 Total assets $50,280 $45,960 Liabilities and Stockholders' Equity Current…arrow_forward90 Marston Corporation Statement of Income for the Year Ending December 31, 2022 Using Sales Agents Using Own Sales Force $26,000,000 Sales Cost of goods sold Variable Fixed Gross margin Marketing costs Commissions Fixed costs Operating income $11,700,000 2,870,000 4,680,000 3,420,000 $26,000,000 14,570,000 11,430,000 8,100,000 $ 3,330,000 $11,700,000 2,870,000 2,600,000 5,500,000 14,570,000 11,430,000 8,100,000 $ 3,330,000 Marston is considering hiring its own sales staff to replace the network of agents. Marston will pay its salespeople a commission of 10% and incur additional fixed costs of $2,080,000. 4 Required 1. Calculate Marston Corporation's 2022 contribution margin percentage, breakeven revenues, and degree of operating leverage under each of the two scenarios. (You will first have to recast the 2022 statement of income assuming Marston had hired its own sales staff.) 2. Describe the advantages and disadvantages of each type of sales alternative. 3. In 2023, Marston uses its…arrow_forwardLL Required Information The following information applies to the questions displayed below.] Westerville Company reported the following results from last year's operations: $ 2,300,00e 670,000 Sales Variable expenses Contribution margin Fixed expenses Net operating income 000'09 Average operating assets $1,437,500 At the beginning of this year, the company has a $287,500 investment opportunity with the following cost and revenue characteristics: Sales Contribution margin ratio Fixed expenses S0% of sales $ 161,000 The company's minimum required rate of return is 15%. 5. What is the turnover related to this year's investment opportunity? (Round your answer to 1 decimal place.) e here to search 近。 F4 F5 F7 F8 F10 F11 て2 24 4 % 9 08.arrow_forward
- hw6 q8 King Mattresses sells both mattress sets and bed frames. Last quarter, total sales were $62,000 for mattress sets and $31,000 for bed frames. Return on investment (ROI) was 20% for both divisions, while asset turnover (AT) was 5 for mattress sets and 2 for bed frames. Compute King Mattresses’s total return on sales (ROS) for the quarter.arrow_forwardBhupatbhaiarrow_forwardProblem 17-2 (LO 17-1) A service company has the... A service company has the following financial information (in millions of $) Sales $510 210 Cost of outsourced facilitating goods Cost of in-house services provided Administrative costs 199 77 Pretax earnings 24 (Round answers to 1 decimal place.) a. What is the profit leverage effect of reducing the cost of the facilitating goods in this company? b. It has been suggested that the in-house services costs could be reduced by 10 percent in the coming year by implementing lean systems. What effect would this have on earnings increase in percentage? c. What is the profit leverage effect of in-house services relative to profits?arrow_forward
- What the answer for 27 The first answer I had was 61,800 The second answer was 25,200 Both was wrongarrow_forward+ I/ V * 00 44 Fence Industries is preparing its annual profit plan. As part of its analysis of the profitability of its customers, management estimates that the $18,500 for sales support should be assigned to the individual customers from the information given as follows: Customer A Customer B Units purchased 135,000 Purchase orders (annual) 28 What is the amount of the sales support costs that should be allocated to Customer A, assuming Fence uses units purchased to compute activity-based costs? Multiple Choice $3,700. $6,750. Mc Graw 17 of 25 10:22 PM Type here to search (Cp ツ 4/15/2021 近 PrtSc Delete 同回 F12 F8 F11 Ins +D 6 & Backsp 23 9. 7. 2. 52 3. G K. B. Alt Ctrlarrow_forwardPLZZ EXPLAINarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Cornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage Learning
Cornerstones of Financial Accounting
Accounting
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Cengage Learning
How To Analyze an Income Statement; Author: Daniel Pronk;https://www.youtube.com/watch?v=uVHGgSXtQmE;License: Standard Youtube License