Intermediate Accounting
9th Edition
ISBN: 9781259722660
Author: J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher: McGraw-Hill Education
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Textbook Question
Chapter 4, Problem 4.5E
Income statement presentation
• LO4–1, LO4–5
The following incorrect income statement was prepared by the accountant of the Axel Corporation:
| AXEL CORPORATION Income Statement For the Year Ended December 31, 2018 |
||
| Revenues and gains: | ||
| Sales | $592,000 | |
| Interest and dividends | 32,000 | |
| Gain on sale of investments | 86,000 | |
| Total revenues and gains | 710,000 | |
| Expenses and losses: | ||
| Cost of goods sold | $325,000 | |
| Selling expenses | 67,000 | |
| Administrative expenses | 87,000 | |
| Interest | 26,000 | |
| Restructuring costs | 55,000 | |
| Income taxes | 60,000 | |
| Total expenses and losses | 620,000 | |
| Net Income | $ 90,000 | |
| Earnings per share | $ 0.90 | |
Required:
Prepare a multiple-step income statement for 2018 applying generally accepted accounting principles. The income tax rate is 40%.
Expert Solution & Answer
Trending nowThis is a popular solution!
Students have asked these similar questions
INCOME STATEMENT Year ended June 30 2022 2021 $'000 $'000Revenue 22450 18675Cost of sales 8475 8055Gross Profit 13975 10620Distribution costs 4245 3120Administrative expenses 1276 2134Selling expenses…
What advice would you give to Juirgen
PROBLEM 17-19 Incomplete Statements; Analysis of Ratios [LO2, LO3, L04]
Incomplete financial statements for Tanner Company are given below:
Tanner Company
Income Statement
For the Year Ended December 31
Revenue.
$2,700,000
Cost of goods sold..
Gross margin.
Selling and administrative expenses . .
?
Net operating income
Interest expense
45,000
Net income before taxes
?
Income taxes, 40%.
?
Net income
2$
?
Scanned by CamScanı
Financial Staterment Analysis
923
Tanner Company
Balance Sheet.
December 31
Non-current Assets:
Plant and equipment, net
Current assets:
Accounts receivable, net . .
Inventory..
Cash and cash equivalents.
Total current assets
$ ?
Total assets
$ ?
Equity:
Common stock, $2.50 par value
Retained earnings
Total equity . . ..
Bonds payable, 10%
Current liabilities
?
$250,000
Total liabilities.
?
Total equity and liabilities
$ ?
The following additional information is available about the company:
Selected financial ratios computed…
Using the financial data for Key Wahl Industries
Sales
Net Profit After Tax
Total Assets
Total Liabilities
O.50
02
O.75
$4,500,000
What is the debt ratio?
O.075
$337,5000
$6,750,000
$ 3,375,000
Chapter 4 Solutions
Intermediate Accounting
Ch. 4 - The income statement is a change statement....Ch. 4 - What transactions are included in income from...Ch. 4 - Prob. 4.3QCh. 4 - Prob. 4.4QCh. 4 - Prob. 4.5QCh. 4 - What are restructuring costs and where are they...Ch. 4 - Define intraperiod tax allocation. Why is the...Ch. 4 - How are discontinued operations reported in the...Ch. 4 - What is meant by a change in accounting principle?...Ch. 4 - Prob. 4.10Q
Ch. 4 - The correction of a material error discovered in a...Ch. 4 - Define earnings per share (EPS). For which income...Ch. 4 - Prob. 4.13QCh. 4 - Describe the purpose of the statement of cash...Ch. 4 - Prob. 4.15QCh. 4 - Explain what is meant by noncash investing and...Ch. 4 - Distinguish between the direct method and the...Ch. 4 - Prob. 4.18QCh. 4 - Prob. 4.19QCh. 4 - Show the calculation of the following...Ch. 4 - Show the DuPont frameworks calculation of the...Ch. 4 - Prob. 4.22QCh. 4 - Prob. 4.23QCh. 4 - Prob. 4.1BECh. 4 - Multiple -step income statement LO41, LO43 Refer...Ch. 4 - Prob. 4.3BECh. 4 - Multiple -step income statement LO41, LO43 The...Ch. 4 - Prob. 4.5BECh. 4 - Prob. 4.6BECh. 4 - Prob. 4.7BECh. 4 - Discontinued operations LO44 Refer to the...Ch. 4 - Discontinued operations LO44 Refer to the...Ch. 4 - Prob. 4.10BECh. 4 - Prob. 4.11BECh. 4 - Prob. 4.12BECh. 4 - Statement of cash flows; indirect method LO48 Net...Ch. 4 - Prob. 4.14BECh. 4 - Prob. 4.15BECh. 4 - Profitability ratios LO410 The 2018 income...Ch. 4 - Prob. 4.17BECh. 4 - Inventory turnover ratio LO410 During 2018, Rogue...Ch. 4 - Operating versus Nonoperating Income LO41 Pandora...Ch. 4 - Income statement format; single step and multiple...Ch. 4 - Income statement format; single step and multiple...Ch. 4 - Multiple-step continuous statement of...Ch. 4 - Income statement presentation LO41, LO45 The...Ch. 4 - Prob. 4.6ECh. 4 - Income statement presentation; discontinued...Ch. 4 - Discontinued operations; disposal in subsequent...Ch. 4 - Discontinued operations; disposal in subsequent...Ch. 4 - Earnings per share LO45 The Esposito Import...Ch. 4 - Comprehensive income LO46 The Massoud Consulting...Ch. 4 - Prob. 4.12ECh. 4 - Prob. 4.13ECh. 4 - IFRS; statement of cash flows LO48, LO49 Refer to...Ch. 4 - Prob. 4.15ECh. 4 - Prob. 4.16ECh. 4 - Statement of cash flows; indirect method LO48...Ch. 4 - Prob. 4.18ECh. 4 - Prob. 4.19ECh. 4 - Statement of cash flows; indirect method LO48...Ch. 4 - Statement of cash flows; direct method LO48 Refer...Ch. 4 - Prob. 4.22ECh. 4 - Prob. 4.23ECh. 4 - Concepts; terminology LO41, LO42, LO43, LO44,...Ch. 4 - Inventory turnover; calculation and evaluation ...Ch. 4 - Evaluating efficiency of asset management LO410...Ch. 4 - Profitability ratios LO410 The following...Ch. 4 - Prob. 4.28ECh. 4 - Prob. 4.29ECh. 4 - Prob. 4.30ECh. 4 - Prob. 4.31ECh. 4 - Prob. 4.32ECh. 4 - Comparative income statements; multiple-step...Ch. 4 - Discontinued operations LO44 The following...Ch. 4 - Income statement presentation; Discontinued...Ch. 4 - Restructuring costs; Discontinued operations;...Ch. 4 - Income statement presentation; Restructuring...Ch. 4 - Income statement presentation; Discontinued...Ch. 4 - Income statement presentation; statement of...Ch. 4 - Multiple-step statement of income and...Ch. 4 - Statement of cash flows LO48 The Diversified...Ch. 4 - Integration of financial statements; Chapters 3...Ch. 4 - Statement of cash flows; indirect method LO48...Ch. 4 - Calculating activity and profitability ratios ...Ch. 4 - Use of ratios to compare two companies in the same...Ch. 4 - Creating a balance sheet from ratios; Chapters 3...Ch. 4 - Prob. 4.15PCh. 4 - Interim financial reporting Appendix 4 Branson...Ch. 4 - Prob. 4.1BYPCh. 4 - Judgment Case 42 Restructuring costs LO43 The...Ch. 4 - Prob. 4.3BYPCh. 4 - Prob. 4.4BYPCh. 4 - Prob. 4.5BYPCh. 4 - Prob. 4.6BYPCh. 4 - Prob. 4.7BYPCh. 4 - IFRS Case 48 Statement of cash flows;...Ch. 4 - Judgment Case 49 Income statement presentation;...Ch. 4 - Prob. 4.10BYPCh. 4 - Integrating Case 412 Balance sheet and income...Ch. 4 - Prob. 4.13BYPCh. 4 - Prob. 4.17BYPCh. 4 - Prob. 4.18BYPCh. 4 - Continuing Cases Target Case LO43, LO44, LO46,...
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
- Question 5 of 7 Presented below are selected ledger accounts of Tucker Corporation as of December 31, 2025. Cash Administrative expenses Selling expenses < Net sales Cost of goods sold Cash dividends declared (2025) Cash dividends paid (2025) Discontinued operations (loss before income taxes) Depreciation expense, not recorded in 2024 Retained earnings, December 31, 2024 Effective tax rate 20% (a) X Your answer is incorrect. Compute net income for 2025. $50,000 100,000 80,000 540,000 210,000 20,000 15,000 40,000 30,000 90,000 0/1 Earrow_forwardDB 4.8 - Comprehensive Income Fulton Corporation reported the following for the current year: net sales $7,500,000; cost of goods sold $4,450,000; selling and administrative expenses $1,420,000; and an unrealized holding gain on available-for-sale securities $75,000. Required: Prepare a statement of comprehensive income (as discussed and illustrated on pages 22-23 of Chapter 4), using: a) the one statement format and b) the two statement format Ignore income taxes and earnings per share.arrow_forwardOMR Net Sales 36000 Commission received 6430 Interest received 3570 Cost of goods sold 7400 Dividends received 2220 From the above information the total income will be: a.OMR 48220 b.OMR 40820 c.OMR 41280 d.OMR 42820arrow_forward
- P DOSS 10 2UZOZ7 TINAL DAIVIINATION BOSS T04 SPRING 21 / FINAL EXAMINATION SPRING 2020-2 Some selected financial statement items belonging to Mirbat Company are given in the table below. According to this information, which of the following is Receivables Turnover ratio? Average Receivables 15,000 Sales 77,000 Gross Profit 30,000 Non-current Assets 80,000 Sales returns 2,000 Shareholders' Equity 65,000 Select one: O a. 0.20 O b. 5 O c 3.33 O d. 5.13arrow_forwardD Question 10 An entity reported the following assets and liabilities at year end: Amount Property Inventory 7M Plant and Equipment 4M Liabilities 4M Tax base Accounts receivable 3M 5.5M Carrying 10M 5M 2.5M 2.4M 6M The entity had made a provision for inventory obsolescense of 1.5M. Further, an impairment loss against accounts receivable of 600,000 has been made. the tax is 30% What amount should be reported as deferred tax liability?arrow_forwardPROBLEM 7 The condensed income statement of ABSOLUTE Corporation for the year ended December 31, 2018 is presented below: Absolute Corporation Income Statement For the year ended December 31, 2018 Sales 1,000,000 Cost of goods sold (600,000) Gross income 400,000 Operating expenses (150,000) Net income 250,000 The December 31, 2018 audit of the company's financial statements disclosed the following errors: The December 31, 2018 inventory is understated by P31,000. Accrued expenses of P4,000 and prepaid expenses of P6,000 were not recognized in the company's books. Sales of P5,000 were not recorded until January 2019, although the goods were shipped in December 2018 and were excluded from the December 31 physical inventory. Purchases of P30,000 made in December 2018 were not recorded although the good were received and properly included in the December 31 physical inventory. A machine was sold for P10,000 on July 1, 2018 and the proceeds were credited to Sales account. The machine was…arrow_forward
- The following information is available for Sunland Corporation for the year ended December 31, 2022: sales revenue $840,000, other revenues and gains $91,000, operating expenses $101,000, cost of goods sold $466,000, other expenses and losses $30,500, and preferred stock dividends $40,950. The company's tax rate was 20%, and it had 70,000 common shares outstanding during the entire year. (a) Your Answer Correct Answer Your answer is partially correct. Prepare a corporate income statement. (List other revenues before other expenses.)arrow_forwardQuestion 4: Us the information below to answer the following questions AR, Net of allowance for uncollectable accounts of 16 and 17 Partial Income statement Revenue COGS Gross Profit SG&A Expense Bad Debt Expense Pre Tax Income Other information Write offs were $9 and $14 in years 1 and 2, respectively There was a recovery of $2 in year 2 Year 1 140 Year 1 1,120 680 440 (350) (12) 78 Year 2 168 Year 2 1,480 720 760 (375) (13) 372 Question 4, Part 1: What entries did the firm make to the allowance for uncollectable accounts in year 1?arrow_forwardDescription FY10 FY11 FY12 FY13 FY14 Financial Statements GBP m GBP m GBP m GBP m GBP m Income Statements Revenue 4,390 3,624 3,717 8,167 11,366 Profit before interest & taxes (EBIT) 844 700 704 933 1,579 Net Interest Payable (80) (54) (98) (163) (188) Taxation (186) (195) (208) (349) (579) Miniorities (94) (99) (105) (125) (167) Profit for the year 484 352 293 296 645 Balance Sheet Fixed Assets 3,510 3,667 4,758 10,431 11,483…arrow_forward
- Breanna Inc. Accounts receivable$10,700Accumulated depreciation 50,800Cost of goods sold 123,000Income tax expense 8,000Cash 62,000Net sales 201,000Equipment 128,000Selling, general, and administrative expenses 32,000Common stock (8,700 shares) 90,000Accounts payable 14,300Retained earnings, 1/1/19 30,000Interest expense 5,600Merchandise inventory 38,600Long-term debt 38,000Dividends declared and paid during 2019 16,200 Item1 Time Remaining 2 hours 32 minutes 36 seconds 02:32:36 Item 1 Time Remaining 2 hours 32 minutes 36 seconds 02:32:36 The information on the following page was obtained from the records of Breanna Inc.: Accounts receivable $ 10,700 Accumulated depreciation 50,800 Cost of goods sold 123,000 Income tax expense 8,000 Cash 62,000 Net sales 201,000 Equipment 128,000 Selling, general, and administrative expenses 32,000 Common stock (8,700 shares) 90,000 Accounts payable 14,300 Retained earnings, 1/1/19…arrow_forwardPROBLEM 13.2A Reporting Investing Activities L LO13-4 An analysis of the income statement and the balance sheet accounts of Hampton, Inc., at December 31 of the current year, provides the following information. Page 611 Income statement items: Gain on Sale of Marketable Securities $ 42,000 Loss on Sales of Plant Assets 33,000 Analysis of balance sheet accounts: Marketable Securities account: Debit entries $ 75,000 Credit entries 90,000 Notes Receivable account: Debit entries 210,000 Credit entries 162,000 Plant and Equipment accounts: Debit entries to plant asset accounts 196,000 Credit entries to plant asset accounts 120,000 Debit entries to accumulated depreciation accounts 75,000arrow_forwardFA12 Income Statement Sections During the current year, Dale Corporation sold a segment of its business at a gain of $315,000. Until it was sold, the segment had a current period operating loss of $112,500. The company had $1,275,000 from continuing operations for the current year. Prepare the lower part of the income statement, beginning with the $1,275,000 income from continuing operations. Follow tax allocation procedures, assuming that all changes in income are subject to a 20% income tax rate. Disregard earnings per share disclosures. (Round all calculations to nearest dollar amount.) Dale Corporation Partial Income Statement Current Year Income from continuing operations Discontinued operations Loss from operations of discontinued segment (net of tax) Answer Gain on disposal of discontinued segment (net of tax) Net income Answer Answer Answer Answerarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
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:PEARSON
Intermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill Education
Financial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education
The KEY to Understanding Financial Statements; Author: Accounting Stuff;https://www.youtube.com/watch?v=_F6a0ddbjtI;License: Standard Youtube License