
Concept explainers
Prepare a schedule showing the calculation of net income and earnings per share that company C’s reports for the three-month period and the six-month period ended June 30, 2015.

Answer to Problem 40P
Net income for three month period is $4,440 and earnings per share are $4.44 and net income for six month period is $9,000 and earnings per share are $9.
Explanation of Solution
A schedule showing the calculation of net income and earnings per share that company C reports for the three-month period
2015 | |
Particulars | 1st Q |
Sales | $ 18,000 |
Less: Cost of goods sold | $ 7,400 |
Gross profit | $ 10,600 |
Less: Operating expenses | $ 3,200 |
Income before income taxes | $ 7,400 |
Income taxes (40%) | $ 2,960 |
Net income | $ 4,440 |
Table: (1)
Earnings per share for three month period
Thus, Earnings per share for three month period is $4.44
A schedule showing the calculation of net income and earnings per share that company C reports for the six-month period ended June 30, 2015
2015 | |
Particulars | |
Sales | $ 38,000 |
Less: Cost of goods sold | $ 16,400 |
Gross profit | $ 21,600 |
Less: Operating expenses | $ 6,600 |
Income before income taxes | $ 15,000 |
Income taxes (40%) | $ 6,000 |
Net income | $ 9,000 |
Table: (2)
Earnings per share for six month period
Thus, earnings per share for six month period is $9
Working note
Schedule showing calculation of net income that company C reports for the two quarters:
2015 | |||
Particulars | 1st Q | 2nd Q | Consolidated balance |
Sales | $ 18,000 | $ 20,000 | $ 38,000 |
Less: Cost of goods sold | $ 7,400 | $ 9,000 | $ 16,400 |
Gross profit | $ 10,600 | $ 11,000 | $ 21,600 |
Less: Operating expenses | $ 3,200 | $ 3,400 | $ 6,600 |
Income before income taxes | $ 7,400 | $ 7,600 | $ 15,000 |
Income taxes (40%) | $ 2,960 | $ 3,040 | $ 6,000 |
Net income | $ 4,440 | $ 4,560 | $ 9,000 |
Table: (3)
Want to see more full solutions like this?
Chapter 8 Solutions
Advanced Accounting (Looseleaf)
- Duo Corporation is evaluating a project with the following cash flows: Year 0 1 2 3 Cash Flow -$ 30,000 12,200 14,900 16,800 4 5 13,900 -10,400 The company uses an interest rate of 8 percent on all of its projects. a. Calculate the MIRR of the project using the discounting approach. Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. b. Calculate the MIRR of the project using the reinvestment approach. Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. c. Calculate the MIRR of the project using the combination approach. Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. a. Discounting approach MIRR b. Reinvestment approach MIRR c. Combination approach MIRR % % %arrow_forwardHello tutor please provide this question solution general accountingarrow_forwardGet correct answer accounting questionsarrow_forward
- Consider a four-year project with the following information: Initial fixed asset investment = $555,000; straight-line depreciation to zero over the four-year life; zero salvage value; price = $37; variable costs = $25; fixed costs = $230,000; quantity sold = 79,000 units; tax rate = 24 percent. How sensitive is OCF to changes in quantity sold?arrow_forwardLight emitting diodes (LED) light bulbs have become required in recent years, but do they make financial sense? Suppose a typical 60-watt incandescent light bulb costs $.39 and lasts 1,000 hours. A 15-watt LED, which provides the same light, costs $3.10 and lasts for 12,000 hours. A kilowatt-hour of electricity costs $.115. A kilowatt-hour is 1,000 watts for 1 hour. If you require a return of 11 percent and use a light fixture 500 hours per year, what is the equivalent annual cost of each light bulb? Note: A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.arrow_forwardRecently, Abercrombie & Fitch has been implementing a turnaround strategy since its sales had been falling for the past few years (11% decrease in 2014, 8% in 2015, and just 3% in 2016.) One part of Abercrombie's new strategy has been to abandon its logo-adorned merchandise, replacing it with a subtler look. Abercrombie wrote down $20.6 million of inventory, including logo-adorned merchandise, during the year ending January 30, 2016. Some of this inventory dated back to late 2013. The write-down was net of the amount it would be able to recover selling the inventory at a discount. The write-down is significant; Abercrombie's reported net income after this write-down was $35.6 million. Interestingly, Abercrombie excluded the inventory write-down from its non-GAAP income measures presented to investors; GAAP earnings were also included in the same report. Question: From an investor standpoint, do you think that the effect of the inventory write-down should be considered when…arrow_forward
- AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
- Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSONIntermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill EducationFinancial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education





