Intermediate Accounting
1st Edition
ISBN: 9780132162302
Author: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella
Publisher: PEARSON
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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.
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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…
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
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