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
Videos
Textbook Question
Chapter 5, Problem 5.8MC
Szuba Corporation reported the following transactions for the current year.
| Sales | $500,000 |
| Cost of goods sold | 300,000 |
| Operating expenses | 100,000 |
| Cash dividend | 50,000 |
| Unrealized gain on available-for-sale security | 10,000 |
| Unrealized gain on trading security | 90,000 |
Ignoring income taxes, Szuba should report other comprehensive income of:
- a. $80,000
- b. $10,000
- c. $60,000
- d. $30,000
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
The income statement of Tavis Corporation and selected additional data are presented below:
Tavis Corporation
Income Statement
for the Year Ended December 31, 2020
Net sales $220,000
Cost of goods sold __109,000
Gross profit 111,000
Selling and general expenses _98,000
Income from operations 13,000
Interest expense __2,500
Income before income tax 10,500
Income tax expense __3,000
Net income $ 7,500
Additional data:
Total assets $214,000
Common stockholders’ equity $116,000
Preferred dividends…
Selected information from the annual financial statements of Delicata Industries is shown below.
($ in thousands)
Revenue
Operating income
Net other income(expense)
Net income
240,000
5,600
196,480
Average operating assets
4,200,000
Average operating liabilities 1,800,000
Current
Financials
$1,500,000
Delicata has an income tax rate of 20%.
a. What is Delicata's net operating profit after taxes (NOPAT) for the year?
$0
b. Calculate Delicata's net operating profit margin (NOPM) for the year.
Result
Numerator + Denominator =
0 + $
0 =
NOPM $
c. Calculate Delicata's return on net operating assets (RNOA) for the year.
Numerator + Denominator =
Result
0 + $
0 =
RNOA $
96
The following data and information are provided for Waltz Corporation. Use net income after taxes as margin.
Sales Revenue $1,000,000 Average total assets used during the year = $200,000
Cost of Goods Sold -500,000 Inventory = $60,000
Gross Margin 500,000 Long-term liabilities = $100,000
Selling Expenses -386,000 Accounts receivable = $10,000
Administrative Expenses -80,000 Cost of total invested capital = 12%
Net Operating Income 34,000 Fixed expenses = $300,000
Other Income & Expense -6,000 Variable expenses = 666,000
Net Income before Taxes 28,000 Average price per unit sold = $10
Income Taxes -8,000
Net Income after Taxes $ 20,000…
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
- The Berndt Corporation expects to have sales of 12 million. Costs other than depreciation are expected to be 75% of sales, and depreciation is expected to be 1.5 million. All sales revenues will be collected in cash, and costs other than depreciation must be paid for during the year. Berndts federal-plus-state tax rate is 40%. Berndt has no debt. a. Set up an income statement. What is Berndts expected net income? Its expected net cash flow? b. Suppose Congress changed the tax laws so that Berndts depreciation expenses doubled. No changes in operations occurred. What would happen to reported profit and to net cash flow? c. Now suppose that Congress changed the tax laws such that, instead of doubling Berndts depreciation, it was reduced by 50%. How would profit and net cash flow be affected? d. If this were your company, would you prefer Congress to cause your depreciation expense to be doubled or halved? Why?arrow_forwardChasse Building Supply Inc. reported net cash provided by operating activities of $243,000, capital expenditures of $112,900, cash dividends of $35,800, and average maturities of long-term debt over the next 5 years of $122,300. What is Chasses free cash flow and cash flow adequacy ratio? a. $94,300 and 0.77, respectively c. $130,100 and 1.06, respectively b. $94,300 and 0.82, respectively d. $165,900 and 1.36, respectivelyarrow_forwardJuroe 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_forward
- Skysong Inc., a greeting card company, had the following statements prepared as of December 31, 2020. SKYSONG INC. COMPARATIVE BALANCE SHEET AS OF DECEMBER 31, 2020 AND 2019 12/31/20 12/31/19 Cash $6,100 $6.900 Accounts receivable 61.900 50,500 Short-term debt investments (available-for-sale) 34,800 18,200 Inventory 39,900 59,800 Prepaid rent 4,900 4.000 Equipment 155,500 131,200 Accumulated depreciation-equipment (34,800 ) (25,300 ) Copyrights 45,700 50.200 Total assets $314,000 $295,500 Accounts payable $46,200 $39,700 Income taxes payable 4,000 6,100 Salaries and wages payable 7,900 4,000 Short-term loans payable 7,900 10,000 Long-term loans payable 59.800 68,600 Common stock, $10 par 100,000 100,000 Contributed capital, common stock 30,000 30,000 Retained earnings 58,200 37,100 Total liabilities & stockholders' equity $314,000 $295,500arrow_forwardNet profit before tax will be: a. OMR 12,740,000 b. OMR 14,540,000 c. OMR 13,440,000 d. OMR 12,540,000 Operating profit for the year will be: a. OMR 15,540,000 b. OMR 10,360,000 c. OMR 15,340,000 d. OMR 13,540,000arrow_forwardBelow is financial information ($ values are in millions) in a model. Net income during the year for this company would be: Revenues SG&A Expenses Interest Expense Select one: OA. $4.5 million OB. $3.6 million O C. $16.6 million OD. $0.9 million $67.30 $4.70 $8.10 Cost of Goods Sold Depreciation Tax Rate $43.20 $6.80 20%arrow_forward
- Calculating the Average Total Assets and the Return on Assets The income statement, statement of retained earnings, and balance sheet for Somerville Company are as follows. Also, assume a tax rate of 31%. Somerville CompanyIncome StatementFor the Year Ended December 31, 20X2 Amount Percent Net sales $8,281,989 100.0% Less: Cost of goods sold (5,383,293) 65.0 Gross margin $2,898,696 35.0 Less: Operating expenses (1,323,368) 16.0 Operating income $1,575,328 19.0 Less: Interest expense (50,000) 0.6 Income before taxes $1,525,328 18.4 Less: Income taxes (31%)* (472,852) 5.7 Net income $1,052,476 12.7 * Includes both state and federal taxes. Somerville CompanyStatement of Retained EarningsFor the Year Ended December 31, 20X2 Balance, beginning of period $1,979,155 Net income $1,052,476 Total $3,031,631 Preferred dividends (80,000) Dividends to common stockholders (201,887) Balance, end of period…arrow_forwardJBC Inc. has the following information reported by its chief accountant for the current year: Sales Operating income Total assets Current liabilities Target rate of return Corporate tax rate WACC $4,500,000 $505,000 $2,500,000 $150,000 18% 35% 13% How much is stakeholders' expected return in dollars? O a) $55,500 O b) $22,750 c) $305,500 d) $305,500arrow_forwardEcare Berhad has the following income statement items for 2021: Revenue/Sales RM4,801,139 Finance costs/Interest expense RM293,938 Other items of income RM38,552 Cost of sales (COGS) RM3,917,144 Income tax expenses 35% of taxable income Dividend payment 40% of net profit What is the amount of the firm's earning before tax? Select one: a. RM628,609 b. RM590,057 c. RM408,596 d. RM883,995arrow_forward
- Yellow Company reported the following information in 2021:· Sales revenue- P500,000· Cost of Goods Sold- P350,000· Operating Expenses- P55,000· Unrealized translation gain- P20,000· Cash dividends received on investment in equity securities- P2,000Ignore income tax, for 2021, Yellow Company would report total comprehensive income before tax of?arrow_forwardYou are given the following information for Smashville, Incorporated. Cost of goods sold: Investment income: Net sales: Operating expense: Interest expense: Dividends: Tax rate: Current liabilities: Cash: $ 184,000 $ 1,600 $ 387,000 $ 88,000 $ 7,400 $ 6,000 21% $ 12,000 $ 21,000 Long-term debt: $ 32,000 $ 40,000 Other assets: Fixed assets: Other liabilities: Investments: Operating assets: $ 125,000 $ 5,000 $ 36,000 $ 64,000 During the year, Smashville, Incorporated, had 17,000 shares of stock outstanding and depreciation expense of $19,000. At the end of the year, Smashville stock sold for $42 per share. Calculate the price-book ratio, price-earnings ratio, and price-cash flow ratio. Note: Do not round intermediate calculations. Round your answers to 2 decimal places. Answer is not complete. Price-book ratio Price-earnings ratio Price-cash flow ratio 15.19arrow_forwardHere are simplified financial statements for Watervan Corporation: INCOME STATEMENT (Figures in $ millions) Net sales $900.00 Cost of goods sold Depreciation Earnings before interest and taxes (EBIT) Interest expense Income before tax 760.00 50.00 $ 90.00 31.00 $ 59.00 12.39 $ 46.61 Taxes Net income BALANCE SHEET (Figures in $ millions) End of Start Year of Year Assets Current assets $ 388 $ 350 Long-term assets 296 241 Total assets $ 684 $ 591 Liabilities and shareholders' equity Current liabilities $ 176 $ 213 Long-term debt Shareholders' equity 127 140 344 256 Total liabilities and shareholders' equity $ 684 $ 572 The company's cost of capital is 8.5%. a. Calculate Watervan's economic value added (EVA). (Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.) b. What is the company's return on capital? (Use start-of-year rather than average capital.) (Do not round intermediate calculations. Enter your answer as a percent rounded to 2…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage Learning
Managerial Accounting: The Cornerstone of Busines...AccountingISBN:9781337115773Author:Maryanne M. Mowen, Don R. Hansen, Dan L. HeitgerPublisher:Cengage Learning
Intermediate Financial Management (MindTap Course...FinanceISBN:9781337395083Author:Eugene F. Brigham, Phillip R. DavesPublisher:Cengage Learning
Cornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage Learning
Fundamentals Of Financial Management, Concise Edi...FinanceISBN:9781337902571Author:Eugene F. Brigham, Joel F. HoustonPublisher:Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:Cengage Learning
Managerial Accounting: The Cornerstone of Busines...
Accounting
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Cengage Learning
Intermediate Financial Management (MindTap Course...
Finance
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Cengage Learning
Cornerstones of Financial Accounting
Accounting
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Cengage Learning
Fundamentals Of Financial Management, Concise Edi...
Finance
ISBN:9781337902571
Author:Eugene F. Brigham, Joel F. Houston
Publisher:Cengage Learning
How To Analyze an Income Statement; Author: Daniel Pronk;https://www.youtube.com/watch?v=uVHGgSXtQmE;License: Standard Youtube License