Intermediate Accounting
1st Edition
ISBN: 9780132162302
Author: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Concept explainers
Textbook Question
Chapter 5, Problem 5.1E
Multiple-Step and Single-Step Statements of Net Income.
The Tamer Tire Company provided the following partial
Tamer Tire Company Trial Balance (Selected Accounts) For the Year Ended December 31 |
||
Account | Debit | Credit |
Dividends | $ 2,300 | |
Sales | $320,000 | |
Interest Income | 12,000 | |
Dividend Income | 8,000 | |
Gain on Flood Damage | 32,000 | |
Gain on Disposal of Plant Assets | 3,400 | |
Unrealized Gain on Trading Investments | 46,000 | |
Cost of Goods Sold | 64,000 | |
Office Supplies Expense | 5,000 | |
Advertising Expense | 10,000 | |
Office Salaries Expense | 14,000 | |
Selling Expenses | 36,000 | |
Accounting and Legal Fees—General | 3,500 | |
Sales Salaries Expense | 7,000 | |
Systems Consulting Fees—General | 2,000 | |
Amortization Expense—General | 11,000 | |
Interest Expense | 4,500 | |
Loss on Asset Impairment | 12,500 | |
Loss on Discontinued Operations—Before Tax | 20,000 | |
Unrealized Loss on Available-for-Sale Bonds | 5,600 |
Required
- a. Prepare a single-step income statement.
- b. Prepare a multiple-step income statement.
Expert Solution & Answer
Trending nowThis is a popular solution!
Students have asked these similar questions
Melville Corporation provided the following partial-trial balance for the current year
Prepare a single-step income statement for the year ended December 31.
Melville is subject to a 40% income tax rate. (Round all amounts to the nearest whole dollar.)
Melville Corporation
Trial Balance (Selected Accounts)
For the Year Ended December 31
Account
Debit
Credit
Dividends
$1,400
Sales
$120,000
Dividend Income
590
Interest Income
900
Gain on Disposal of Plant Assets
1,100
Unrealized Gain on Trading Investments
1,700
Cost of Goods Sold
45,000
Office Supplies Expense
4,100
Sales Salaries Expense
3,300
Selling Expenses
15,000
Accounting and Legal Fees—General Expense
830
Advertising Expense
3,800
Office Salaries Expense
6,600
Depreciation Expense—General Expense
9,400
Interest Expense
2,200
Loss on Asset Impairment
2,400
Selected account balances from the adjusted trial balance for Olinda Corporation as of its calendar year-end December 31 follow. Assume that the company’s income tax rate is 40% for all items.
Debit
Credit
a.
Interest revenue
$ 14,400
b.
Depreciation expense—Equipment
$ 34,400
c.
Loss on sale of equipment
26,250
d.
Accounts payable
44,400
e.
Other operating expenses
106,800
f.
Accumulated depreciation—Equipment
72,000
g.
Gain from settlement of lawsuit
44,400
h.
Accumulated depreciation—Buildings
175,300
i.
Loss from operating a discontinued segment (pretax)
18,650
j.
Gain on insurance recovery of tornado damage
29,520
k.
Net sales
1,002,500
l.
Depreciation expense—Buildings
52,400
m.
Correction of overstatement of prior year’s sales (pretax)
16,400
n.
Gain on sale of discontinued segment’s assets (pretax)
36,000
o.
Loss from settlement of lawsuit
24,150
p.
Income tax expense
?
q.
Cost of goods sold
486,500…
Selected account balances from the adjusted trial balance for Olinda Corporation as of its calendar year-end December 31 follow. Assume that the company’s income tax rate is 40% for all items.
Debit
Credit
a.
Interest revenue
$ 14,400
b.
Depreciation expense—Equipment
$ 34,400
c.
Loss on sale of equipment
26,250
d.
Accounts payable
44,400
e.
Other operating expenses
106,800
f.
Accumulated depreciation—Equipment
72,000
g.
Gain from settlement of lawsuit
44,400
h.
Accumulated depreciation—Buildings
175,300
i.
Loss from operating a discontinued segment (pretax)
18,650
j.
Gain on insurance recovery of tornado damage
29,520
k.
Net sales
1,002,500
l.
Depreciation expense—Buildings
52,400
m.
Correction of overstatement of prior year’s sales (pretax)
16,400
n.
Gain on sale of discontinued segment’s assets (pretax)
36,000
o.
Loss from settlement of lawsuit
24,150
p.
Income tax expense
?
q.
Cost of goods sold
486,500…
Chapter 5 Solutions
Intermediate Accounting
Ch. 5 - What are the three limitations of the income...Ch. 5 - In what way is the income statement useful for...Ch. 5 - Prob. 5.3QCh. 5 - Prob. 5.4QCh. 5 - What management behavior does the term earnings...Ch. 5 - What is the difference between permanent and...Ch. 5 - Prob. 5.7QCh. 5 - Prob. 5.8QCh. 5 - Prob. 5.9QCh. 5 - Prob. 5.10Q
Ch. 5 - What are the six key items to be reported on the...Ch. 5 - Explain why operating income is an important...Ch. 5 - Prob. 5.13QCh. 5 - Prob. 5.14QCh. 5 - What items are included in net income?Ch. 5 - Are items of other comprehensive income included...Ch. 5 - What two choices must companies make when...Ch. 5 - Prob. 5.18QCh. 5 - Prob. 5.19QCh. 5 - Are companies reporting under U.S. GAAP required...Ch. 5 - What accounts are summarized on the statement of...Ch. 5 - What is financial statement analysis?Ch. 5 - Prob. 5.23QCh. 5 - What are comparative financial statements and why...Ch. 5 - What is the difference between vertical and...Ch. 5 - Prob. 5.26QCh. 5 - Explain the difference between return on equity...Ch. 5 - How is a companys profit margin calculated?Ch. 5 - Prob. 5.1MCCh. 5 - Moore Furniture Inc., a public company, has...Ch. 5 - Beach and Poole, CPA is reviewing income statement...Ch. 5 - Prob. 5.4MCCh. 5 - Allison Corporations current year income from...Ch. 5 - Prob. 5.6MCCh. 5 - Chili Co. had the following balances at December...Ch. 5 - Szuba Corporation reported the following...Ch. 5 - Prob. 5.9MCCh. 5 - Prob. 5.1BECh. 5 - Prob. 5.2BECh. 5 - Advantages and Disadvantages of the Income...Ch. 5 - Identify each of the earnings items as primarily...Ch. 5 - Income Statement Presentation. Place the...Ch. 5 - Statement of Net Income Presentation, IFRS. Which...Ch. 5 - Single-Step Statement of Net Income. Carr...Ch. 5 - Statement of Net Income, IFRS. Using the...Ch. 5 - Multiple-Step Statement of Net Income. Using the...Ch. 5 - Condensed Statement of Net Income. Using the...Ch. 5 - Prob. 5.11BECh. 5 - Prob. 5.12BECh. 5 - Prob. 5.13BECh. 5 - Prob. 5.14BECh. 5 - Computation of Retained Earnings. Taxi Cabs, Inc...Ch. 5 - Computation of Contributed Capital. Using the...Ch. 5 - Prob. 5.17BECh. 5 - Prob. 5.18BECh. 5 - Prob. 5.19BECh. 5 - Ratio Analyses. Green Grasshopper Incorporated is...Ch. 5 - Multiple-Step and Single-Step Statements of Net...Ch. 5 - Condensed Statement of Net Income. Using the trial...Ch. 5 - Prob. 5.3ECh. 5 - Prob. 5.4ECh. 5 - Multiple-step Statement of Net Income. The current...Ch. 5 - Condensed Statement of Net Income. Using the...Ch. 5 - Multiple-step income Statement. Ciara s Cookie...Ch. 5 - Prob. 5.8ECh. 5 - Prepare Statement of Stockholders' Equity. Dane...Ch. 5 - Prepare Statement of Stockholders Equity. Ciaras...Ch. 5 - Prepare a Statement of Stockholders' Equity....Ch. 5 - Prob. 5.12ECh. 5 - Multiple-Step and Single-Step income Statement,...Ch. 5 - Condensed Income Statement. Using the information...Ch. 5 - Multiple-step, Single-step, and Condensed...Ch. 5 - Statement of Net Income Presentation. IFRS....Ch. 5 - Income Statement Presentation, Classification, and...Ch. 5 - Multiple-step, Single-step, and Condensed...Ch. 5 - Statement of Comprehensive Income Single-and...Ch. 5 - Prepare Statement of Stockholders Equity. Use the...Ch. 5 - Prob. 5.9PCh. 5 - Prob. 1JCCh. 5 - Prob. 1FSACCh. 5 - Prob. 2FSACCh. 5 - Prob. 1SSCCh. 5 - Surfing the Standards Case 2: Amounts Paid by...Ch. 5 - Prob. 1BCCCh. 5 - Prob. 2BCC
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
- Selected account balances from the adjusted trial balance for Olinda Corporation as of its calendar year-end December 31 follow. Assume that the company’s income tax rate is 40% for all items. Debit Credit a. Interest revenue $ 14,400 b. Depreciation expense—Equipment $ 34,400 c. Loss on sale of equipment 26,250 d. Accounts payable 44,400 e. Other operating expenses 106,800 f. Accumulated depreciation—Equipment 72,000 g. Gain from settlement of lawsuit 44,400 h. Accumulated depreciation—Buildings 175,300 i. Loss from operating a discontinued segment (pretax) 18,650 j. Gain on insurance recovery of tornado damage 29,520 k. Net sales 1,002,500 l. Depreciation expense—Buildings 52,400 m. Correction of overstatement of prior year’s sales (pretax) 16,400 n. Gain on sale of discontinued segment’s assets (pretax) 36,000 o. Loss from settlement of lawsuit 24,150 p. Income tax expense ? q. Cost of goods sold 486,500…arrow_forwardSelected account balances from the adjusted trial balance for Olinda Corporation as of its calendar year-end December 31 follow. Assume that the company’s income tax rate is 40% for all items. Debit Credit a. Interest revenue $ 14,400 b. Depreciation expense—Equipment $ 34,400 c. Loss on sale of equipment 26,250 d. Accounts payable 44,400 e. Other operating expenses 106,800 f. Accumulated depreciation—Equipment 72,000 g. Gain from settlement of lawsuit 44,400 h. Accumulated depreciation—Buildings 175,300 i. Loss from operating a discontinued segment (pretax) 18,650 j. Gain on insurance recovery of tornado damage 29,520 k. Net sales 1,002,500 l. Depreciation expense—Buildings 52,400 m. Correction of overstatement of prior year’s sales (pretax) 16,400 n. Gain on sale of discontinued segment’s assets (pretax) 36,000 o. Loss from settlement of lawsuit 24,150 p. Income tax expense ? q. Cost of goods sold 486,500…arrow_forwardSelected account balances from the adjusted trial balance for Olinda Corporation as of its calendar year-end December 31 follow. Assume that the company’s income tax rate is 30% for all items. Debit Credit a. Interest revenue $ 14,600 b. Depreciation expense—Equipment $ 34,600 c. Loss on sale of equipment 26,450 d. Accounts payable 44,600 e. Other operating expenses 107,000 f. Accumulated depreciation—Equipment 72,200 g. Gain from settlement of lawsuit 44,600 h. Accumulated depreciation—Buildings 175,700 i. Loss from operating a discontinued segment (pretax) 18,850 j. Gain on insurance recovery of tornado damage 29,720 k. Net sales 1,004,500 l. Depreciation expense—Buildings 52,600 m. Correction of overstatement of prior year’s sales (pretax) 16,600 n. Gain on sale of discontinued segment’s assets (pretax) 37,000 o. Loss from settlement of lawsuit 24,350 p. Income tax expense ? q. Cost of goods sold 488,500…arrow_forward
- Timber Company provided the following information for the current year: LOADING... (Click the icon to view the information.) The company is subject to a 40% income tax rate. Read the requirements LOADING... . Requirement a. Prepare a single statement of comprehensive income beginning with operating income. (Use parentheses or a minus sign to enter any loss amounts.) Pine Timber Company Statement of Comprehensive Income For the Year Ended December 31 Operating Income $342,000 Other Revenues and Expenses Unrealized Gain on Trading Portfolio $13,000 Loss on Sale of Investments in Bonds (27,000) (14,000) Income Before Tax $328,000 Income Tax Expense (131,200) Income From Continuing Operations $196,800 Discontinued Operations Income From Operations of Discontinued Segment, Net of Tax $22,800 Loss From…arrow_forwardMellville Corporation provided the following partial-trial balance for the current yearPrepare a single-step income statement for the year ended December 31. Melville is subject to a 40% income tax rate Melville Corporation Trial Balance (Selected Accounts) For the Year Ended December 31 Account Debit Credit Dividends $1,400 Sales $120,000 Dividend Income 590 Interest Income 900 Gain on Disposal of Plant Assets 1,100 Unrealized Gain on Trading Investments 1,700 Cost of Goods Sold 45,000 Office Supplies Expense 4,100 Sales Salaries Expense 3,300 Selling Expenses 15,000 Accounting and Legal Fees—General Expense 830 Advertising Expense 3,800 Office Salaries Expense 6,600 Depreciation Expense—General Expense 9,400 Interest Expense 2,200 Loss on Asset Impairment 2,400 Revenue and Gains…arrow_forwardIncome tax expense has not yet been recorded. The income tax rate is 40%. Determine the following: (a) operating income (loss), (b) income (loss) before income taxes, and (c) net income (loss).arrow_forward
- The following data represent the diffence between accounting and tax income for Seafood Imports Inc., whose pre-tax accounting income is $695,000 for the year ended December 31. The company's income tax rate is 45%. Additional information relevant to income taxes includes the following. a. Capital cost allowance of $270,000 exceeded accounting depreciation expense of $157,000 in the current year. b. Rents of $29,000, applicable to next year, had been collected in December and deferred for financial statement purposes but are taxable in the year received. c. In a previous year, the company established a provision for product warranty expense. A summary of the current year's transactions appears below: ii. Warranty Expense for the Year 42,500 iii. Payments made to fulfill product warranties. 35,000 d. Insurance expense to cover the company's excutive officers was $7,500 for the year. Required: Prepare all the journal entries to record income taxes for Seafood…arrow_forwardhelp with this pleasearrow_forward(Click the icon to view the information.) The company is subject to a 40% income tax rate. Read the requirements. Requirements a. Prepare a single statement of comprehensive income beginning with operating income. b. Prepare separate statements of net income and comprehensive income. Print - X Done More info 1. Operating income amounted to $310,000. 2. The company sold investments in bonds at a pre-tax loss of $19,000. 3. Tall reported a $5,800 unrealized loss on an available-for-sale portfolio that is included in other comprehensive income. 4. The company reported a $17,000 unrealized gain on its trading portfolio, which is included in net income. 5. Tall committed to discontinue its retail lumber stores division on January 1 of the current year. The retail lumber stores meet the criteria to be presented as a discontinued operation. The retail lumber stores accounted for 25% of the company's operating income. The stores were operated all year. 6. The retail lumber stores division was…arrow_forward
- Juroe Company provided the following income statement for last year: Juroes balance sheet as of December 31 last year showed total liabilities of 10,250,000, total equity of 6,150,000, and total assets of 16,400,000. Refer to the information for Juroe Company on the previous page. Also, assume that Juroes total assets at the beginning of last year equaled 17,350,000 and that the tax rate applicable to Juroe is 40%. Required: Note: Round answers to two decimal places. 1. Calculate the average total assets. 2. Calculate the return on assets.arrow_forwardCurrent Attempt in Progress Swifty Wholesalers Ltd. has a December 31 year end. The company incurred the following transactions related to current liabilities: 1. Swifty's cash register showed the following totals at the end of the day on March 17: pre-tax sales $55,000, GST $2,750, and PST $3,850. 2. 3. Swifty remitted $49,000 of sales taxes owing from March to the government on April 30. Swifty paid its employees for the week of August 15 on August 20. The gross pay was $80,000. The company deducted $4,240 for CPP, $1,264 for El, $6,400 for pension, and $16,020 for income tax from the employees' pay. 4. Swifty recorded the employer portions of CPP and El for the week of August 15 on August 20 for $4,240 and $1,770, respectively. 5. On September 15, all amounts owing for employee income taxes, CPP, and El pertaining to the payroll transactions above were paid. 6. On December 31, Swifty's legal counsel believes that the company will have to pay damages of $62,000 next year to a local…arrow_forwardGiga Inc has the following information: Unearned service revenue=$16,680 Sales tax payable=$8,490 Accounts payable=54,470 1.In the month of January dated 05, the company sold merchandise of cash amounting to $16,200, which includes 8% sales tax amount. 2.Jan-12-Services to customers who made advance payment of 11,490 3.Jan-14-Payment paid to state revenue department for sales tax collected in december 2014 (8,490) 4.Jan-20-Company sold 800 units of a new product on credit at 50 per unit, plus 8% sales tax 5.Jan-21-Borrowed 27,000 from Emerald Bank on 3-month, 8%, 27,000 note. 6.Jan-25-Company sold merchandise for cash totaling 10,098 which includes 8% sales tax. Required: January transactions-Journal entriesarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Managerial Accounting: The Cornerstone of Busines...AccountingISBN:9781337115773Author:Maryanne M. Mowen, Don R. Hansen, Dan L. HeitgerPublisher:Cengage Learning
Managerial Accounting: The Cornerstone of Busines...
Accounting
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Cengage Learning
The KEY to Understanding Financial Statements; Author: Accounting Stuff;https://www.youtube.com/watch?v=_F6a0ddbjtI;License: Standard Youtube License