FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Sandhill Corporation is preparing the comparative financial statements for the annual report to its shareholders for fiscal years
ended May 31, 2020, and May 31, 2021. The income from operations for the fiscal year ended May 31. 2020, was $1.793.000 and
income from continuing operations for the fiscal year ended May 31. 2021, was $2.412,000. In both years, the company incurred
a 10% interest expense on $2.393,000 of debt, an obligation that requires interest-only payments for 5 years. The company
experienced a loss from discontinued operations of S614.000 an February 2021. The company uses a 20% effective tax rate for
income taxes.
The capital structure of Sandhill Corporation on June 1. 2019. consisted of 971.000 shares of common stock outstanding
and 20,500 shares of $50 par value, 6%, cumulative preferred stock. There were no preferred dividends in arrears, and the company
had not issued any convertible securities, options, or warrants.
On October 1. 2019, Sandhill sold an additional 510.000 shares of the common stock at $20 per share. Sandhill distributed a 20%
stock dividend on the common shares outstanding on January 1.2020. On December 1. 2020, Sandhill was able to sell an
additional 764.000 shares of the common stock at $22 per share. These were the only common stock transactions that occurred
during the two fiscal years.
Prepare, in good form, a comparative income statement, beginning with income from operations, for Sandhill Corporation for
the fiscal years ended May 31, 2020, and May 31. 2021. This statement will be included in Sandhill's annual report and should
display the appropriate earnings per share presentations. (Round earnings per share to 2 decimal places, eg $1.55.)
SANDHILL CORPORATION
Comparative Income Statement
For Fiscal Years Ended May 31, 2020 and 2021
2020
2021
Income From Operations
1793000
2412000
Loss From Discontinued Operations
239300
239300
Income Before Taxes
1553700
2172700
Income Taxes
310740
434540
Income From Continuing Operations v
1242960
1738160
Loss From Discontinued Operations
Net Income/(Losa)
1242960
Earnings per share:
Income From Continuing Operations
Loss From Discontinued Operations
Loss From Discontinued Operations
Net Income/ (Loss)
%24
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Transcribed Image Text:Sandhill Corporation is preparing the comparative financial statements for the annual report to its shareholders for fiscal years ended May 31, 2020, and May 31, 2021. The income from operations for the fiscal year ended May 31. 2020, was $1.793.000 and income from continuing operations for the fiscal year ended May 31. 2021, was $2.412,000. In both years, the company incurred a 10% interest expense on $2.393,000 of debt, an obligation that requires interest-only payments for 5 years. The company experienced a loss from discontinued operations of S614.000 an February 2021. The company uses a 20% effective tax rate for income taxes. The capital structure of Sandhill Corporation on June 1. 2019. consisted of 971.000 shares of common stock outstanding and 20,500 shares of $50 par value, 6%, cumulative preferred stock. There were no preferred dividends in arrears, and the company had not issued any convertible securities, options, or warrants. On October 1. 2019, Sandhill sold an additional 510.000 shares of the common stock at $20 per share. Sandhill distributed a 20% stock dividend on the common shares outstanding on January 1.2020. On December 1. 2020, Sandhill was able to sell an additional 764.000 shares of the common stock at $22 per share. These were the only common stock transactions that occurred during the two fiscal years. Prepare, in good form, a comparative income statement, beginning with income from operations, for Sandhill Corporation for the fiscal years ended May 31, 2020, and May 31. 2021. This statement will be included in Sandhill's annual report and should display the appropriate earnings per share presentations. (Round earnings per share to 2 decimal places, eg $1.55.) SANDHILL CORPORATION Comparative Income Statement For Fiscal Years Ended May 31, 2020 and 2021 2020 2021 Income From Operations 1793000 2412000 Loss From Discontinued Operations 239300 239300 Income Before Taxes 1553700 2172700 Income Taxes 310740 434540 Income From Continuing Operations v 1242960 1738160 Loss From Discontinued Operations Net Income/(Losa) 1242960 Earnings per share: Income From Continuing Operations Loss From Discontinued Operations Loss From Discontinued Operations Net Income/ (Loss) %24
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